Multiple stablecoins launching as 2018 becomes “the year of the Stablecoins”. The Cryptocurrency industry has been full of new stablecoins coming into the market with a vengeance in 2018. One of the most well-known stablecoins, Tether (USDT), has been under fire, especially in late 2017 and 2018, and as such, a niche for reliable stablecoins has emerged.
One of the most popular cryptocurrency exchanges, Coinbase, has launched the USD Coin stablecoin (USDC). This is the first stablecoin for trade on Coinbase’s platform. News of USDC broke at the Money 20/20 conference on October 23rd. USDC was developed by Coinbase and Circle, a blockchain-powered payments technology company.
Coinbase customers in supported jurisdictions can now purchase, sell, send, and receive USDC at Coinbase and its various platforms, including iOS and Android apps. Coinbase noted in its statement that US customers outside the state of New York are able to buy and sell, while customers around the world can send and receive USDC.
Coinbase plans to have USDC coming to its Coinbase Pro platform in the coming weeks, and USDC is already supported on its Coinbase Wallet, with more areas to become available in the future. USDC is purportedly 100% backed with US dollars that are held in accounts that are subject to public reporting of reserves.
At the Money 20/20 conference in Las Vegas, Coinbase president and COO Asiff Hirji said: “We are issuing stablecoins backed 1:1 with the US dollar, completely audited, completely transparent. We think this is a key step toward unlocking innovation in crypto.”
A stablecoin is a digital currency tied to another stable currency like the US dollar, and its purpose is to minimize price volatility, therefore, protecting assets if you choose. The value of a stablecoin is based on the value of the backing fiat currency, which is held by a third party.
Another announcement at the Money 20/20 conference was the creation of a stablecoin pegged to the Australian Dollar. This stablecoin will be based off the Stellar Blockchain.
Announced by the Novatti Group, an Australian payment technology company, this stablecoin will be released on November 19th, 2018. Their banking partners were not named.
Peter Cook, managing director of Novatti, stated that the purpose of the stablecoin will be as a usable currency, saying: “We think that people will use them to help purchase goods from Australian enterprises. And we think that will also use them for the payment of bills or for services inside of Australia.”
Bitcoin has been recognized as a legal tender in Australia since September 2017, and required blockchain firms to register since January of this year.
Earlier this month, Tether found itself in hot water after volatility caused it to lose its long-time peg to the US dollar. USDT found itself near $0.87 cents before stabilizing. The problems arose amid rumors that crypto exchange Bitfinex, the CEO of which is also the CEO of Tether, was facing insolvency.
Following the news, Cryptocurrency investor and entrepreneur Michael Novogratz said that USDT should create more “transparency” about its operations. Novogratz said that he thinks “Tether didn’t do a great job in terms of creating transparency,” while also noting that “the concept of stablecoins make sense.”
Needless to say, BTC and USDT and their movements are closely correlated. Traders actively look to USDT for stability during times of BTC volatility. What do you think of these new stablecoins? Let us know on Facebook!