How to Use Stablecoins for Everyday Transactions: A Guide

Bittime - In the crypto world, the use of stablecoins is increasingly popular as a means of everyday payment. 

Stablecoins offer value stability relative to fiat currencies, making them an attractive option for daily transactions. 

However, how do you actually use stablecoins for everyday transactions? Read this article to find out how.

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Advantages of Using Stablecoins in Transactions

Value Stability

One of the main advantages of stablecoins is the stability of their value. 

Stablecoins are generally pegged or backed by stable assets, such as fiat currency or commodities, which makes them more stable compared to other cryptocurrencies whose value fluctuates.

Transaction Efficiency

Stablecoins enable faster and cheaper transactions compared to traditional payment methods. 

By using blockchain as the infrastructure, users can carry out cross-border transactions with low transaction fees and fast settlement times.

Global Access

Stablecoins enable global access to digital financial systems. 

By having a wallet account that supports stablecoins, users can easily make transactions with anyone around the world without having to worry about geographic restrictions or currency conversion issues.

Also Read: Aave Community Voting Results: 99.9% Approve PayPal's PYUSD Stablecoin Integration

How to Use Stablecoins for Everyday Transactions

Online Payment

Transacting using Stablecoins for online purchases is relatively easy and is often similar to using fiat currency. 

Stablecoins are cryptocurrencies whose value is tied to an underlying asset, such as a fiat currency (e.g. US dollar, euro) or commodity (e.g. gold). 

Here are the general steps for making online purchases using Stablecoins:

1. Select a Purchase Platform

First of all, select the online platform where you want to make your purchase. 

It could be an online store, payment service, or trading platform that accepts payments using Stablecoins.

2. Have a Wallet or Account

Make sure you have a digital wallet or account on a cryptocurrency exchange platform that supports the Stablecoin you want to use. 

This wallet will be used to store and send your Stablecoins.

3. Buy Stablecoins

If you don't already own a Stablecoin, you will need to purchase one from a cryptocurrency exchange that supports it. 

You can exchange fiat currencies or other cryptocurrencies to get Stablecoins. 

This purchasing process will involve transferring your funds to an exchange, placing a purchase order, and receiving the Stablecoin to your wallet once the purchase is complete.

4. Select Goods or Services

Once you have the Stablecoin in your wallet, visit the website or platform where you want to make a purchase. 

Select the items or services you want to purchase and add them to your shopping cart as usual.

5. Select Payment Method

When it comes to the payment step, select the payment option using cryptocurrency or Stablecoin if available. 

The purchasing platform will provide the option to pay using your digital wallet address.

6. Send Payment

Copy the wallet address provided by the purchasing platform and paste it into your wallet where you store Stablecoins. 

After that, enter the amount of Stablecoin you want to send for purchase.

7. Confirm Payment

Once you send a payment using Stablecoin, wait until the transaction is confirmed by the blockchain network. 

This transaction can take a few minutes to a few hours depending on network speed and density.

8. Receive Purchase Confirmation

Once your payment is confirmed, you will receive a purchase confirmation from the platform you made the purchase from. 

The confirmation will contain details of your order and shipping information if required.

9. Receive Goods or Services

Finally, wait until the goods or services you purchased are delivered or provided by the seller. 

Once you receive the goods or services, your transaction will be complete.

It is important to ensure that you use a trusted and secure wallet and trading platform when transacting using Stablecoins. 

Always check the reviews and reputation of the platform before making a purchase. 

Additionally, make sure to store your private keys and account information securely to protect your digital assets.

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Transfer Money Between Friends

Transacting using stablecoins to transfer funds to friends is relatively simple and can often be done quickly. 

Here are the general steps:

1. Choose a Suitable Stablecoin

First, make sure you and your friends are using digital wallets that support the same stablecoin.

Select a suitable stablecoin to use in the transaction. Examples of popular stablecoins include USDT (Tether), USDC (USD Coin), DAI, and others.

2. Make sure the digital wallet is connected

Make sure that you and your friends have digital wallets connected to the same blockchain network.

You can use a wallet provided by a cryptocurrency exchange, a software wallet (such as MetaMask ), or a hardware wallet (such as the Ledger Nano S) that supports the stablecoin you choose.

3. Enter the Recipient's Wallet Address

Ask your friends to provide their digital wallet addresses. This is a unique character set used to accept cryptocurrency transactions.

Make sure you enter your wallet address correctly, as cryptocurrency transactions cannot be reversed once sent.

4. Select the Amount to Send

Determine the amount of stablecoins you want to send to your friend. 

Make sure you check the transaction fees charged by the blockchain network , as these fees can vary depending on the current state of the network.

5. Transaction Initiation

Log in to your digital wallet and find the option to send stablecoins. 

Select the stablecoin you want to send, then enter the recipient's wallet address and the amount to send.

6. Transaction confirmation

Before you confirm a transaction, double-check the details entered to make sure they are correct. 

Make sure the recipient's wallet address and the amount to be sent match what your friend requested.

Once you are sure all the information is correct, proceed to confirm the transaction.

7. Wait for transaction confirmation

Once you confirm the transaction, wait until the transaction is confirmed by the blockchain network.

The time required for transaction confirmation may vary depending on network congestion at that time.

8. Tell Your Friends

Once the transaction is successfully confirmed, tell your friends that you have transferred stablecoins to them.

Make sure they check their wallet to ensure that the funds have been received correctly.

Usage in DeFi Applications

Using stablecoins for transactions in DeFi (Decentralized Finance) involves a different set of steps than using other cryptocurrencies, as stablecoins are designed to maintain a fixed value against an underlying asset, such as the US dollar.

Here are the general steps for using stablecoins in DeFi transactions:

1. Choose a Suitable DeFi Platform

First, you need to choose a DeFi platform that suits your needs and preferences. 

The preferences in question can be lending protocols, decentralized exchanges (DEX), decentralized financial markets (money markets), or other platforms in the DeFi ecosystem.

2. Choose a Suitable Stablecoin

Select the stablecoin you want to use for DeFi transactions. 

Some commonly used stablecoins in DeFi include USDT (Tether), USDC (USD Coin), DAI, and others.

Make sure to choose a stablecoin that is supported by the DeFi platform you choose.

3. Access DeFi Wallet

Make sure you have access to a DeFi wallet that supports the stablecoin you choose. 

There are many options for DeFi wallets, for example software wallets (such as MetaMask), hardware wallets (such as the Ledger Nano S), or integrated wallets provided by certain DeFi platforms.

4. Add Stablecoins to Wallet

If you don't already have stablecoins in your DeFi wallet, you will need to add them. 

5. Select the DeFi transaction you want to carry out

Select the DeFi transaction you want to make. 

For example, you can choose to stake your stablecoins in a lending protocol to earn interest, exchange stablecoins for other cryptocurrencies on a DEX, or use stablecoins as collateral to borrow another cryptocurrency.

6. Follow Platform Instructions

Once you have selected the transaction you want to make, follow the instructions provided by the DeFi platform. 

These instructions typically consist of filling out a form, selecting the amount of stablecoin you wish to transact, and approving the transaction using your DeFi wallet.

7. Transaction confirmation

Once you approve the transaction, wait until the transaction is confirmed by the blockchain network. 

It generally takes a few seconds to a few minutes, depending on network density and transaction complexity.

Also Read: What is Aave? DeFi Platform Pioneer

8. Verify Transaction Status

Once the transaction is successfully confirmed, verify its status on the DeFi platform. 

Make sure the transaction has been successful and your stablecoins have been received or deposited according to the purpose of your transaction.

9. Monitor Your Transactions

Lastly, make sure to monitor your transactions regularly to ensure everything runs smoothly. 

Regularly monitor the interest rate received if you store stablecoins in a lending protocol, or monitor changes in value if you exchange on a DEX.

Always be sure to exercise caution and understand the risks associated with using stablecoins in DeFi transactions, including smart contract risks , liquidity risks, and other risks. 

Always conduct careful research before using a particular DeFi platform and consider consulting a financial professional if necessary.

Conclusion

Stablecoins are useful and practical tools for carrying out everyday transactions in the crypto ecosystem. 

With the stability of value, transaction efficiency, and global access they offer, stablecoins are becoming an attractive option for individuals and businesses to replace traditional payment methods. 

Through this article, you can start using stablecoins to carry out your daily transactions easily and conveniently.

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Read Also:

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What Are Fractional Stablecoins?

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What Are Collateralized Stablecoins? Get the complete explanation here

 

DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.