How to start using stablecoins

To obtain your first stablecoins, follow the same process as when obtaining a major traditional cryptocurrency like Bitcoin or Ethereum

Stablecoins are a more stable form of cryptocurrency and are considered ‘safer’ due to less volatility and movement compared to the biggest cryptocurrencies such as Bitcoin and Ethereum.

To obtain your first stablecoins, follow the same process as when obtaining a major traditional cryptocurrency like Bitcoin or Ethereum:

  • Create a wallet
  • Choose an exchange you wish to purchase the stablecoins from
  • Send fiat (or on-ramp) currency from your bank to the exchange
  • Swap your fiat into the stablecoin
  • Send your stablecoin into your wallet (Or if you want to generate yield with them, read here)
  • Process finished

Although the process to purchase most stablecoins are similar, different types of stablecoins exist:

How can I start using GBPT

Our GBPT Nexus guide provides a simple collection of major crypto locations to access GBPT.

Additionally, you can acquire GBPT through OTC trading on bfex.im

What are the pros and cons of investing in stablecoins?

Pros

  • Retain capital 
    Stablecoins can be used as a hedge against inflation to retain the maximum amount of value, compared to fiat losing the ongoing battle to inflation
  • Pegged to stable, non-volatile assets
    GBPT is pegged to the British Pound, one of the strongest currencies in the world
  • Ability to earn higher interest rate compared to TradFi
    Compared to traditional finance, the earnable interest rates with stablecoins are higher, and this makes them attractive to investors to hold as part of a portfolio

Cons

  • No centralised help
    If there is a problem with your bank, a payment doesn’t go through, or you temporarily lose some money, there is often a helpline to help assist you with your problem. With stablecoins, the sole responsibility for storage, safety and usage relies solely upon yourself and then also the platforms you choose to use
  • Some lack backing
    Some stablecoins, such as algorithmic stablecoins, are not backed by an asset and are inherently riskier compared to fiat and commodity-backed stablecoins

You can find out more about Poundtoken’s own reserves for the GBPT stablecoin here. For more information, visit our complete guide to stablecoins.

Published On: April 26th, 2023 / Categories: /
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