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Looking good comes with a cost. Ask cosmetologists. The average price of beauty school is $16,000 a year.

A career in cosmetology can be rewarding. You get a creative outlet and a chance to help others look their best. It also offers flexibility for a good work-life balance. But the licensing process can add up.

Cosmetology and esthetics programs are offered through community, technical, and vocational colleges — accredited institutions that qualify for financial aid. Accreditation broadens the range of financial aid options. Prospective students can consider interest-free payment plans, financial aid from schools, scholarships, grants, and loans from the government or private entities. Read on for more detailed information on the types of financial aid that pay for cosmetology school, and what options don’t.

Esthetician vs Cosmetology School

Esthetician (or aesthetician) licenses specialize in skincare treatment, recommendations, and analysis. Treatments include facials, massages, and waxing. With this license, you can work at spas, salons, or doctor’s offices, such as plastic surgeons or dermatologists.

Cosmetology covers the creative styling of hair, skin, and nails — but also provides basic training in treatments. Students can get an esthetician license through a cosmetology program. A career in cosmetology can lead to work as a makeup artist, hairstylist, or manicurist. License holders typically work in salons, spas, the entertainment industry, and hotels or resorts. The table below outlines some of the differences between an esthetics license and a cosmetology license.

Field	Esthetics License	Cosmetology License
Average School Tuition	$7,433 average of top ten US schools	$16,000
Subjects	Techniques and science behind skin care treatments. Specific subjects include skin anatomy, facial and makeup techniques, hair removal, and medical office esthetics.	Hair, skin, and nail care and styling. Specific subjects include dermatology, makeup, and haircutting.
2021 Median Salary	$37,300/year	$29,680/year
Job Growth 2020-30	29% (Faster than US average)	19% (Faster than US average)
Types of Jobs	Skin care specialist (esthetician), makeup artist	Hair Stylist, nail technician, makeup artist, barber

Be sure that your school is state-approved. You can search for schools through your local government’s licensing process. Also, it’s helpful to know whether your certificate is transferable to other states and which states accept it. This way, your time and resources aren’t lost.

Below are organizations that can help you find accredited and state-approved programs:

•  Accrediting Commission of Career Schools and Colleges (ACCSC)

•  Accrediting Council for Continued Education & Training (ACCET)

•  Council on Occupational Education (COE)

•  National Accrediting Commission of Career Arts and Sciences (NACCAS)

Typical Cost of Beauty Schools

Beauty school programs are generally more affordable than the average four-year program. According to the College Board’s annual Trends in College Pricing report, during the 2021 school year, the average cost of tuition at a four-year nonprofit institution was $38,070. Cosmetology students, in contrast, can expect to pay around $16,000 to complete a degree in their field. But beauty school students still borrow $7,300 per year on average.

Esthetician School

Requirements for esthetics licenses vary by state. Connecticut is the only state that does not require a license.

Students can expect to complete 300 to 1,500 hours depending on state program requirements. Most states require students to pass a state-issued exam to obtain a license after completion of a program. For example, Washington requires students to complete a program of not less than 750 hours and to fill out a license application.

Students can also specialize in esthetics as part of their overall cosmetology program.

Cosmetology School

Each state requires a cosmetology license in order to practice. While requirements differ, most states require three things: you must be 16 or older, hold a high school diploma, and have completed a state-licensed cosmetology program.

Some states also require an exam in order to obtain a license. And some require regular license renewals.

While states can issue a license that covers all cosmetology specialties, some require separate licenses in specializations such as barbering or manicures.

Programs range anywhere from 1,000 to 2,100 hours across states, and usually include retail and business admin training to supplement. Specializing in a field, such as nail care, requires additional hours. Finally, programs are hands-on—meaning students have limited online options.

To find out your state’s requirements, the National-Interstate Council of State Boards of Cosmetology has a registry of state offices. ​​

Possible Funding Source #1: FAFSA®

Does FAFSA pay for cosmetology school? Yes! But, students who apply must be enrolled in an accredited program to be eligible.

The first step to applying for government financial aid is filling out a Free Application for Federal Student Aid (FAFSA) form. New forms are released each year on October 1st — and the sooner you complete one, the more likely federal grants will be available.

Information provided on the FAFSA helps to determine your eligibility for federal student aid. The government, states, and colleges also use it to determine the amount of financial aid to award you. Schools you list in your form will review your FAFSA and put together an aid offer. If your school’s financial aid does not cover the entire cost of tuition, you can use the FAFSA to apply for federal grants and student loans.

Not familiar with setting up FAFSA? This FAFSA guide provides an overview of the form and the aid options available through the FAFSA. Here’s a brief explainer on some of the aid types that may be available to students.

Recommended: FAFSA 101: How to Complete the FAFSA

Pell Grants

The government awards Pell Grants to students from lower-income families and who have not previously earned a degree. Unlike loans, they do not need to be repaid.

The Pell Grant’s 2022-2023 maximum is $6,895 and students may be eligible for up to twelve terms. The amount is determined by the following:

•  Expected Family Contribution (EFC), or the amount your family can pay

•  Cost of Attendance (COA), finalized in your school offer letter

•  Full-time or part-time status as s student

•  Length of your school’s academic year

Schools will disburse the federal grant to you directly, apply it to your tuition, or both. In order to receive Pell Grants, students must stay enrolled in their respective program of study and fill out the FAFSA form each year.

Direct Subsidized and Unsubsidized Loans

The Department of Education also offers Direct Loans. Cosmetology students may be eligible for either subsidized or unsubsidized loans. The government pays for the interest rate of subsidized loans as long as you’re enrolled in a program, for the first six months after leaving school, and during qualifying deferment periods. Interest rates for unsubsidized loans are not covered. Subsidized loans are awarded based on financial need, while unsubsidized loans are not.

Applying for a federal loan offers these key advantages:

•  Low fixed interest rates

•  Flexible repayment plans

•  Possibility of forgiven loans

•  Deferment and forbearance options

Parent PLUS Loans

PLUS loans are available to parents of undergraduate students or graduate or professional students. They offer some of the advantages of federal Direct Loans, but offer higher borrowing limits.

Parents can apply for Parent PLUS Loans on behalf of their children as well. Unlike other federal student loans, these types require a credit check and are not based on financial need.

Possible Funding Source #2: Scholarships

Research scholarships. A good place to start is with your school. Their aid letter will outline scholarships awarded from its program. You can contact them to see if there are additional scholarships you can apply for at the school.

Professional associations also offer scholarships based on need or merit. The below beauty industry associations have lists of scholarships.

•  Professional Beauty Association

•  National-Interstate Council of State Boards of Cosmetology

•  American Association of Cosmetology Schools

The U.S. Department of Labor also offers a free scholarship finder .

Finally, ethnicity-based groups, employers, or your parent’s employers may also offer tuition assistance and scholarships.

Possible Funding Source #3: Working Part Time

Since cosmetology programs are shorter in duration — working part-time to help pay for college is feasible. Try getting work in your field — as an assistant or admin at an office. That way, you can learn while getting paid — and even get a foot in the door.

Studying and working is a fine balance. It depends on how much time you can commit. If studying fills up most of your week — you may not be able to focus on studying for the career you hope to work in and may also hurt your score needed to pass exams needed to work in the industry.

You can even find working cosmetologists to get advice on how to do both.

Possible Funding Source #4: Private Student Loans

After exhausting all other avenues of aid, private student loans can help cover the difference. A private undergraduate student loan can be offered through banks, credit unions, and online lenders. They can be applied to a range of programs, even applied towards paying for CDL school.

Lenders will perform a credit check to determine your interest rate and how much you are eligible for. Students who don’t have credit scores will need a cosigner, usually a parent.

Possible Funding Source #5: School-Specific Financial Aid

Financial aid availability depends on your school.

Aveda Institute Maryland, for example, offers financial assistance for current and former military servicemen. Paul Mitchell Schools also offer three forms of military financial aid. One includes a My Career Advancement Account Scholarship Program for military spouses.

Delgado Community College in New Orleans provides financial assistance on a first-come, first-serve basis. Students must complete a FAFSA, online scholarship form, and accept or decline their aid offer letter.

Possible Funding Source #6: School-Specific Payment Plans

College tuition payment plans are an option. Instead of paying tuition upfront at the beginning of the year, students pay tuition in installments.

Payment plans are an excellent alternative to taking out loans since plans are generally interest-free. Check with your school for eligibility requirements and deadlines for enrollment periods.

The Board of Cooperative Educational Services in Western Suffolk, Long Island, and Alexander Paul Institute of Hair Design offer no-interest payment plans.

Explore Private Student Loans With SoFi

Cosmetology and esthetician careers require state-approved schooling and licenses. These accredited programs are covered by federal financial aid, and some schools offer financial aid. Zero-interest payment plans can also be a huge help to pay for a program.

If you still come up short of tuition, you can explore private student loans.

SoFi offers student loans that offer qualifying borrowers competitive private student loan rates. Plus, there are no fees and flexible repayment plans. The application process can be completed online.

Find out if you qualify for an undergraduate student loan or graduate student loan in just a few minutes.*

FAQ

Can FAFSA be used for beauty school?

Yes. States require students to participate in state-approved accredited beauty schools to obtain a license. Students enrolled in post-secondary programs at accredited institutions qualify for financial aid.

Do you work and earn money while in cosmetology school?

Students typically cannot work in their field without a license, unless it’s an unrelated job in the industry. Find out if your school participates in the Federal Work-Study Program. These programs are available to part-time or full-time students with financial needs. Students will usually find jobs at their school or private for-profit employers that have agreements with your school. The jobs are typically relevant to your field of study.

Are beauty schools accredited? How do you select a good program?

Yes, beauty schools can be accredited for post-secondary education. Always check to make sure your program is accredited to avoid predatory schools with poor programming. Consider starting your search with state license departments. The National-Interstate Council Of State Boards Of Cosmetology has a directory of all 50 states’ centers.

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Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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Your credit score is based on the information about your debts and payments reported by lenders to the three main credit bureaus — Experian, Equifax, and TransUnion. The credit reporting bureaus typically ask to receive information once per month. So, credit card companies will usually report card payments to the credit reporting bureaus at the end of your card’s monthly billing cycle, also known as your statement date. Credit card companies typically spread statement dates throughout the month.

Here’s a closer look at how payments are reported to the credit reporting bureaus as well as how factors like on-time payments can affect your credit score.

How Credit Card Payments Are Reported to Bureaus

As mentioned above, credit card issuers typically report to credit bureaus on your regular billing cycle. Each credit card may report at different times, and they may report to some of the major credit bureaus and not others. Reporting is up to the lender’s discretion, so it is also entirely possible that they won’t make a report at all.

Credit bureaus may collect a variety of information, including:

•   Personal information, such as name, address, date of birth, Social Security number, and employer

•   Credit account information, such as balances, payments, credit limits, credit usage, and when accounts are opened or closed

•   Credit inquiries

How Credit Scores and Reports Are Updated

The credit reporting bureaus will generally update your credit score as soon as they receive information from your credit card company. That means that your credit score could change relatively frequently as you make credit card charges, especially if you have multiple credit cards.

Also, because credit card companies only report credit activity periodically, there can be a bit of a lag in how long it takes for a payment to show on your credit card report. When you read your credit report it may not match your current account balances, instead reflecting the last information reported to the bureaus. This situation may be particularly irksome if you’ve paid off debts in hope of boosting your credit score. Fortunately, your information should be updated during the next reporting period.

However, if you notice that no changes are made after a number of months, it’s worth contacting your lender to make sure changes are reported correctly. If they can’t resolve it, you can contact the credit bureau.

Recommended: Charge Cards Advantages and Disadvantages

How Credit Card Balances Affect Credit Score

Credit reporting bureaus may collect information about your credit card balance. There is a popular misconception that carrying a credit card balance from month to month will help you improve your credit score. However, this is a myth. In fact, carrying a balance can actually hurt your score.

An unpaid balance is not necessarily seen as a bad thing. However, credit utilization — how much of your available credit you’re using — can have an impact on your score. If your balance exceeds 30% of your borrowing limit, it may have a negative impact on your score. Those who keep their credit utilization below 10% tend to have the highest credit scores.

It’s best to pay off your credit card balance each month to protect your credit score and to avoid racking up costly interest charges, which can cause your credit card debt to balloon.

How Applying to Credit Cards Affects Credit Score

Before you apply for a credit card, it’s important to know the difference between a hard and soft inquiry. When you apply, you will trigger what’s known as a hard inquiry when a lender requests to see your credit report. In contrast, a soft inquiry occurs when you check your own credit or use a credit monitoring service, for example. Hard inquiries will generally have a negative impact on your credit score, while soft inquiries will not.

Hard inquiries suggest that you are in the market for new credit. That may seem like a no-brainer. But in the eyes of other lenders, a hard inquiry suggests that you may be in some sort of financial stress that makes you a bigger risk for borrowing money. This is especially true if you have many hard inquiries in a short period of time.

Luckily, the hard inquiry stays on your credit report for only two years, and its effects fade relatively quickly.

In general, it’s wise to avoid causing many hard inquiries in a short period of time. There are some exceptions to that rule. If you’re shopping for a mortgage, auto loan, or new utility providers, multiple inquiries in a short period — typically 14 to 45 days — are usually counted as just one inquiry.

How On-Time Payments Affect Credit Score

Your payment history is one of the biggest factors that goes into calculating your credit score. As a result, making payments on time is one of the best things you can do to maintain a strong credit score or to improve your score.

Even a single late payment can have a negative impact on your score, though the missed payment likely will not show up on your credit report for 30 days. If you can make up the payment within that time period, your lender may not report it, though you may still be subject to late penalties.

It’s also important to understand that if you only make a partial payment, that will still usually be counted as late and reported as such to the credit bureaus.

To make sure that you pay bills on time, consider setting up a budget to help control your spending. You might also automate your bill pay to ensure you don’t miss any payment due dates. But if you do so, make sure that you have enough money in your account to cover your credit card balance.

Recommended: When Are Credit Card Payments Due

The Takeaway

The credit reporting bureaus collect all sorts of financial information from your various lenders to create your credit score. Your credit card company likely reports your card activity about once a month. Understanding what information has an impact on your score, and the impact of on-time payments and credit inquiries, can help you keep your score as high as possible and help keep credit card costs down.

Applying for a credit card through SoFi won’t affect your credit score, though an approved application may trigger a hard inquiry.

The SoFi Credit Card offers unlimited 2% cash back on all eligible purchases. There are no spending categories or reward caps to worry about.¹

Take advantage of this offer by applying for a SoFi credit card today.

FAQ

What time of the month do creditors report to credit bureaus?

Creditors may report to the credit bureaus at any time of the month, though credit card companies will usually make their reports at the end of the billing cycle.

How often do companies report credit?

Credit card companies usually report to the credit bureaus once a month. However, they do so at their own discretion.

How long after paying off debt will your credit score improve?

Your credit score should improve after paying off a debt as soon as that debt payment is reported to the reporting bureaus, usually within 30 days. If your payment doesn’t show up on your report after a few months, contact your lender to make sure it was reported correctly.

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Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Checking Your Rates: To check the rates and terms you may qualify for, SoFi conducts a soft credit pull that will not affect your credit score. However, if you choose a product and continue your application, we will request your full credit report from one or more consumer reporting agencies, which is considered a hard credit pull and may affect your credit.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

The SoFi Credit Card is issued by SoFi Bank, N.A. pursuant to license by Mastercard® International Incorporated and can be used everywhere Mastercard is accepted. Mastercard is a registered trademark, and the circles design is a trademark of Mastercard International Incorporated.

SoFi cardholders earn 2% unlimited cash back rewards when redeemed to save, invest, a statement credit, or pay down eligible SoFi debt.

¹Members earn 2 rewards points for every dollar spent on purchases. No rewards points will be earned with respect to reversed transactions, returned purchases, or other similar transactions. When you elect to redeem rewards points into your SoFi Checking or Savings account, SoFi Money® account, SoFi Active Invest account, SoFi Credit Card account, or SoFi Personal, Private Student, or Student Loan Refinance, your rewards points will redeem at a rate of 1 cent per every point. For more details please visit the Rewards page. Brokerage and Active investing products offered through SoFi Securities LLC, member FINRA/SIPC. SoFi Securities LLC is an affiliate of SoFi Bank, N.A.

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Stablecoins are digital currencies that maintain a fixed value. They are designed to function like fiat currencies that exist on the blockchain. This brings with it several benefits in terms of usability, speed, and regulatory compliance. There are multiple types of stablecoins, each defined by the mechanism used to maintain the 1-to-1 peg to their respective fiat currencies.

What Are Stablecoins?

Stablecoins are digital coins that maintain a stable value. Most stablecoins are pegged to popular fiat currencies like the U.S. Dollar, Chinese Yuan, or the Euro. Some are pegged to commodities like gold, too. In theory, a stablecoin could have its value linked to anything. However, coins pegged to a fiat currency are the most commonly used type. When someone uses the term “stablecoin,” they are most likely referring to fiat currency coins.

The most stable cryptocurrency will by definition be a stablecoin. Some of these coins see their values fluctuate by small amounts during times of intense cryptocurrency trading volume, but they tend to correct back to their normal value in short order.

If there is any volatility in a stablecoin, it’s certainly much less than that seen in other types of cryptocurrencies.

What Is the Point of a Stablecoin?

Stablecoins have a variety of benefits and uses. The main idea is to have a cryptocurrency that is not subject to the volatility of other cryptos like Bitcoin and the many hundreds of altcoins.

Beyond that, there are other benefits that make using a stablecoin preferable to using regular fiat currency in some situations. Some of the most commonly cited reasons for creating and using stablecoins are:

•   Regulatory compliance for crypto exchanges

•   Utility in decentralized finance (DeFi)

•   Ease of use for traders

•   The ability to make fast cross-border payments with low fees

Let’s look at each of these in detail.

Stablecoins Make Things Easier for Crypto Exchanges

With stablecoins, cryptocurrency exchanges get to sidestep the complex financial regulations involved with institutions that deal with fiat currencies. (Crypto regulations are very different; and still evolving.) This gives their users the convenience of having stablecoin trading pairs while keeping everything within the cryptocurrency ecosystem.

Stablecoins Are Essential to Decentralized Finance (DeFi)

Stablecoins are becoming a necessary component of the decentralized finance (DeFi) space. Investors can make transactions like peer-to-peer lending — where people make direct loans to each other via blockchain — with stablecoins.

Some users might prefer this option to other cryptocurrencies, which could hurt their rate of return if the price goes down. A stablecoin adds an element of predictability to financial arrangements.

Stablecoins Make Trading Easier

One group of people who often use stablecoins to their advantage are cryptocurrency traders.

When moving money between multiple volatile cryptocurrencies, holding onto profits can be difficult. While traders can always put their gains into Bitcoin (BTC), the largest cryptocurrency by market cap, bitcoin itself has bouts of volatility.

Stablecoins can provide an easy solution to this problem. Traders can simply move into a stablecoin like USD Coin (USDC) or Tether (USDT) to immediately lock in gains. Or, they can take advantage of arbitrage opportunities when the same cryptocurrency has a different price on two different exchanges.

Crypto exchanges have begun offering more stablecoin/altcoin pairs to make things easier for traders.

Stablecoins Enable Fast, Cheap Cross-border Payments

Traditional bank transfers typically take anywhere from three-to-five business days and can cost anywhere from a few dollars to dozens of dollars. International transfers tend to be the most expensive.

Stablecoin transactions can be confirmed within minutes, or less, and at very little cost. Two people with stablecoin wallets can transact with each other from anywhere in the world at any time without the need for a bank or other third-party intermediary.

Different Types of Stablecoins

There are four basic types of stablecoins:

1. Centralized Coins Backed by Fiat Currency

The most popular stablecoins today use a centralized model and back new token issues with fiat currency at a one-to-one ratio. U.S. Dollar Coin (USDC) and Tether (USDT) are examples of this type of coin. In terms of real daily trading volume, USDT and USDC were the number-one and number-six most-traded cryptocurrencies, respectively, at the time of writing, according to data from Messari.

2. Decentralized Coins Backed by Cryptocurrency

Some other stablecoins that use a decentralized model, like DAI, have grown in popularity in the crypto community. Rather than maintaining their stable value through fiat reserves, users can lock up cryptocurrency as collateral for borrowing DAI on the Maker DAO platform. There are also a growing number of decentralized lending platforms that allow users to deposit DAI or other stablecoins and earn interest. Network consensus, rather than a centralized team, governs DAI (similar to how Bitcoin works), which maintains a value equal to one U.S. dollar.

3. Decentralized Algorithmic Coins

Decentralized algorithmic coins are a newer technology and differ from the other types of stablecoins in that they don’t involve any type of collateral backing. Instead, they rely on smart contracts to maintain their price.

4. Stablecoins Backed by Non-Currency Assets

Some stablecoins are backed by other assets, like gold. The overall functions remain the same, but the value is tied to the current price of gold, with physical gold used as collateral.

Are Stablecoins a Good Investment?

Because a stablecoin retains the same value as another asset, most often a fiat currency, asking if stablecoins are good investments is like asking if cash is a good investment.

Stablecoins might be best thought of as tools to use in an emerging DeFi system instead of other types of assets. These coins let traders and users of DeFi apps interact with a form of fiat currency directly on the blockchain. Stablecoins are an integral part of how DeFi works.

Benefits of Stablecoins

Stablecoin holders can use their stablecoins without needing to use a bank account, which increases access to financial services for some people. These coins also benefit from the security of blockchain technology.

One way stablecoins could be used as an investment is to earn interest on them. Some crypto exchanges and lending platforms offer higher interest rates on stablecoin deposits than most banks do on cash deposits.

Drawbacks of Stablecoins

Stablecoins also don’t have the same consumer protections in place that traditional banks do. Users will need to hold their stablecoin balance via any number of crypto storage methods and the cryptocurrency wallet of their choice.

Critics have cited a potential lack of transparency regarding their reserves of stablecoins. In other words, it can be difficult to know whether the company behind the coin actually holds one dollar for each dollar-backed stablecoin.

The Most Popular Stablecoins

A handful of stablecoins make up the lion’s share of market cap for this particular type of digital asset. Here’s a short list of stablecoins that are popular as of this writing.

1. DAI

DAI is a decentralized stablecoin governed by the Maker Protocol and its smart contracts, which in turn is governed by a community of MKR token holders. More than 400 apps and services have currently integrated DAI.

2. Tether

Tether (USDT) is the most popular stablecoin in terms of daily trading volume and the third largest cryptocurrency by market cap at the time of writing according to Coinmarketcap.com. Launched in 2014, USDT is one of the oldest stablecoins in the crypto market.

Tether is a fiat-collateralized stablecoin that trades on most cryptocurrency exchanges. Tether is also the fourth most valuable crypto by market capitalization and one of the most stable cryptocurrencies.

3. Binance

Binance USD (BUSD) is also pegged to the U.S. dollar. Binance is among the largest crypto exchanges in the world. And BUSD is the native coin of the Binance exchange. The company developed BUSD to enhance the speed of effecting crypto transactions on its own platform, as well as globally.

BUSD is approved by the New York State Department of Financial Services (NYDFS).

4. USD Coins

USD Coins (USDC) is backed by real dollars stored at financial institutions. USD Coins performs audits to ensure that each dollar backing each coin is accounted for on record. This helps to maintain the one-to-one relationship between USDC and the U.S. dollar.

USD Coin says it holds in reserve a mix of cash and cash equivalents, including U.S. Treasurys, to back every USDC in circulation. Like many other stablecoins, USDC runs on the Ethereum blockchain.

5. Paxos

Paxos Pax Dollar (USDP) is a financial technology (fintech) stablecoin. It’s distinguished as the first regulated blockchain infrastructure platform for financial services. Paxos’ products are helping to build the foundation for a decentralized financial system that can operate faster and more efficiently than the current legacy systems. Along with Binance and other cryptos, PAX is also approved by NYDFS.

Gaining New York state’s stamp of approval went a long way toward helping Paxos enter the crypto space. Its partnerships with payments giant, PayPal and behemoth, Bank of America, have brought digital assets to millions of people almost instantly.

What’s the Most Stable Cryptocurrency?

Theoretically, any stablecoin should be stable; most of them see their values fluctuate by no more than 1% or 2% daily. The decentralized and algorithmic stablecoins have experienced somewhat more volatility than the centralized coins, historically.

Stablecoins Wrap-Up

Stablecoins are cryptocurrencies that keep their value stable in relation to another asset — most commonly, an existing fiat currency, such as the U.S. dollar.

Issuing these coins on a permissionless blockchain removes the barriers to entry associated with banks and the legacy financial system at large; it provides greater access to financial services for those who may not otherwise have the opportunity to participate in the world of finance.

Everyone from the unbanked to day traders, and those braving the rough new world of decentralized finance, may have a potential use case for stablecoins.

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Investment Risk: Diversification can help reduce some investment risk. It cannot guarantee profit, or fully protect in a down market.

Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

Crypto: Bitcoin and other cryptocurrencies aren’t endorsed or guaranteed by any government, are volatile, and involve a high degree of risk. Consumer protection and securities laws don’t regulate cryptocurrencies to the same degree as traditional brokerage and investment products. Research and knowledge are essential prerequisites before engaging with any cryptocurrency. US regulators, including FINRA , the SEC , and the CFPB , have issued public advisories concerning digital asset risk. Cryptocurrency purchases should not be made with funds drawn from financial products including student loans, personal loans, mortgage refinancing, savings, retirement funds or traditional investments. Limitations apply to trading certain crypto assets and may not be available to residents of all states.

Non affiliation: SoFi isn’t affiliated with any of the companies highlighted in this article.

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