Cryptocurrencies have gained immense popularity, but their volatility can be challenging for users. Stablecoins like USDT and USDC, pegged to fiat currencies like the US dollar, offer much-needed stability within the crypto ecosystem. These assets combine the benefits of digital currencies with the steady value of traditional money, making them essential for both beginners and experienced traders.

For white label crypto wallets, supporting stablecoins enhances user trust by providing a stable environment for transactions and storage. This makes stablecoins crucial assets in any crypto wallet, offering stability and flexibility in an otherwise volatile market.

What are Stablecoins?

Stablecoins are digital assets designed to maintain a stable value by being pegged to a reserve, typically a fiat currency like the US dollar. Unlike traditional cryptocurrencies such as Bitcoin and Ethereum, which are highly volatile due to market speculation, stablecoins aim to provide a consistent, reliable value. This stability makes them an essential tool for users who want the benefits of cryptocurrency without the risk of price swings.

There are different types of stablecoins based on their reserve backing. Fiat-backed stablecoins, like USDT (Tether) and USDC (USD Coin), are the most common, with each token backed 1:1 by actual USD reserves held in banks. Other stablecoins are backed by commodities or even other cryptocurrencies, but fiat-backed versions are the most widely used due to their simplicity and direct tie to a stable asset.

The main difference between stablecoins and other cryptocurrencies lies in their purpose and price behavior. While Bitcoin and Ethereum often fluctuate wildly, driven by speculation, stablecoins are specifically designed to stay close to their peg, making them ideal for transactions, remittances, and storing value. USDT and USDC are leading examples of stablecoins, widely adopted across exchanges and wallets due to their trustworthiness and liquidity.

Key Reasons Why Your Wallet Needs Stablecoins

  1. Stability During Market Volatility: Stablecoins act as a safe haven during periods of market instability, protecting your assets from the price swings of volatile cryptocurrencies. By holding USDT or USDC, you can avoid sudden losses while remaining within the crypto ecosystem.
  2. Easy Onboarding and Exit: Stabelcoins make it easier for users, especially beginners, to enter and exit the crypto market. They enable simple conversions between cryptocurrencies and fiat, offering a smooth transition for those looking to avoid the complexities of volatile crypto assets.
  3. Cross-border Transactions: Stablecoins facilitate low-cost, fast international transfers, bypassing the delays and fees of traditional banking systems. They are particularly useful in real-world applications like remittances and cross-border business payments, offering a more efficient alternative to fiat currency transfers.
  4. Liquidity and Trading: Coins like USDT and USDC are highly liquid assets, making them essential for quick trades and transfers. Traders use stablecoins as a bridge between volatile cryptocurrencies and fiat currencies, ensuring fast transactions without losing value to market fluctuations.
  5. Participation in DeFi: Stablecoins form the backbone of decentralized finance (DeFi) activities such as lending, borrowing, and staking. Wallets that support stablecoins like USDT and USDC allow users to unlock the full potential of DeFi and take advantage of these emerging financial opportunities.

Real-World Use Cases of Stablecoins in White-Label Crypto Wallets

Stablecoins have become an essential component of the crypto landscape, offering real-world use cases that are particularly powerful when integrated into white-label crypto wallets. These wallets, customized by businesses for their users, benefit greatly from the stability and flexibility of assets like USDT and USDC. Here are some practical applications:

  1. Cross-border Payments and Remittances:
    Stablecoins enable fast, low-cost international transfers, making them ideal for remittances. White-label wallets supporting stablecoins can offer users the ability to send money across borders without relying on traditional banking, avoiding high fees and long transaction times. This makes stablecoins a valuable tool for users who need quick and affordable global payment solutions.
  2. E-commerce and Merchant Payments:
    For businesses using white-label wallets, stablecoins provide a reliable option for accepting payments without the risk of price volatility that comes with traditional cryptocurrencies. Merchants can accept USDT or USDC with confidence that their value won’t fluctuate during transactions, allowing for more seamless crypto-to-fiat conversions.
  3. DeFi Integration and Yield Farming:
    White-label crypto wallets that integrate DeFi functionality can enable users to participate in lending, borrowing, and staking stablecoins. This opens up new financial opportunities for users who wish to generate passive income or access decentralized financial services, all within the stability of fiat-pegged assets like USDT and USDC.
  4. Stable Store of Value for Volatile Markets:
    In times of crypto market instability, stablecoins act as a safe haven for users who want to avoid volatility. White-label wallets with stablecoin support allow users to easily switch between volatile assets and stablecoins, preserving the value of their holdings without needing to exit the crypto ecosystem entirely.
  5. Instant Settlements for Peer-to-Peer Transactions:
    White-label wallets supporting stablecoins enable quick, reliable peer-to-peer payments. Users benefit from stable, instant settlements without the value fluctuations of volatile cryptocurrencies. For wallet providers, exchange fees offer revenue opportunities: with a 0.5% fee, 1,000 users making $500 in monthly transactions could generate around $2,500 per month, or $30,000 annually, from stablecoin exchanges. This makes stablecoins both practical for users and profitable for businesses.

For example, Evercode’s partner experienced remarkable growth and achieved significant milestones after building a crypto wallet with Stablecoins. It helped to grow the target audience and open the way to WEB3. These use cases demonstrate how white-label crypto wallets can enhance user experiences and broaden financial possibilities by integrating stablecoins like USDT and USDC. Stablecoins not only provide stability but also enable a range of practical applications that benefit both individuals and businesses.

Conclusion

In summary, stablecoins like USDT and USDC are essential for any crypto wallet due to their unmatched stability, high liquidity, and flexibility. They provide a safe harbor during market volatility, facilitate seamless trading, and enable participation in DeFi. Whether for cross-border payments, remittances, or as a stable store of value, stablecoins are crucial for enhancing user experience and functionality.

If you’re looking to create a white-label wallet with stablecoin support, contact Evercode Lab today to build a solution tailored to your needs and provide your users with the benefits of stablecoins. We can add in your crypto wallet USDT, USDC, DAI, PYUSD and others.