African Reserves

EXPLAINER: 4 Stablecoins available to Africans and where you can get them

Stablecoins have drawn a lot of attention, amidst the TerraUSD ($UST) stablecoin crash in May 2022, which wiped out $42 billion for $UST and $LUNA holders.

That being said, several stablecoins continued to maintain their peg to the dollar, remaining stable as expected.

These include reserve asset stablecoins such as:

  • USDC
  • USDT
  • BUSD
  • A fourth is cUSD, which has an algorithmic mechanism backed by a basket of other cryptocurrencies.

All 4 stablecoins are available to Africans on reputable exchanges.

$USDC

USD Coin ($USDC) was launched in 2018 by Center, a consortium founded by Circle and Coinbase. It was created to be a regulated stablecoin that “operates within US money transmission laws and regulations” while running on blockchain technology.

Like other secured stablecoins, the value of $USDC is pegged to the US dollar. This means that a $USDC should ideally always be worth a dollar.

$USDC is natively supported on several Layer 1 blockchains, including:

  • Ethereum as an ERC-20 token
  • Algorand as an ASA token
  • Solana as an SPL token
  • TRON as a TRC-20 token
  • Stellar as a native asset

$USDC as one of the leading stablecoins is available for purchase on major exchanges including Binance which is also accessible to Africans.

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SEE ALSO: How Stablecoins Help Absorb the Blow of Nigerian Crypto Regulation

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$B USD

Binance USD ($BUSD) is a regulated, fiat-backed, US dollar pegged stablecoin. For every unit of BUSD, there is one US dollar in reserve. In other words, the supply of $BUSD is pegged to the US dollar at a ratio of 1:1. Holders can exchange their tokens for fiat and vice versa.

Paxos, the issuer of the token, publishes monthly attestations of BUSD reserves.

As a stablecoin, $BUSD is designed to maintain a stable market value. It allows investors and traders to hold a low volatility asset on the blockchain without needing to leave the crypto space.

Binance offers several ways to buy this stablecoin:

  • Buy billions of US dollars in cash
  • You can convert other stablecoins for $BUSD
  • Buy $BUSD with other crypto you have

Alternatively, you can go to the Paxos website and convert US dollars directly to $BUSD. Paxos will take your fiat, add it to reserves, and then mint new coins for you.

$BUSD is available to Africans through the Binance exchange, including Binance P2P.

$USDT

Tether (often referred to by its symbol – USDT) is a stable cryptocurrency that is hosted on the Ethereum and Bitcoin blockchains, among others.

Its tokens are issued by the Hong Kong company Tether Limited, itself controlled by the owners of Bitfinex. Tether is called a stablecoin because it was originally designed to always be worth $1.00, maintaining $1.00 in reserves for each Tether issued.

$USDT is available to buy or trade on major crypto exchanges, including:

USDT can also be purchased on P2P exchanges, including Paxful and Binance P2P, both of which are available in Africa.

$cUSD

Celo Dollar ($cUSD) is a stablecoin from the Celo Foundation. It is designed to provide a mobile-friendly form of digital cash that can be used by the world’s 6 billion smartphone users.

$cEURO is a stable digital asset that algorithmically tracks the euro.

$cUSD and $cEURO are backed by the Celo Reserve, a diversified portfolio of cryptocurrencies.

You can buy $cUSD with fiat or trade it for other crypto on the following exchanges:

Stablecoins are useful because investors and traders use them to trade cryptocurrencies without risking their asset losing value in the volatile crypto market. Investors can earn passive income using stablecoin through staking and other means.

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RECOMMENDED READING: How Stablecoins Protect Against Market Volatility

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