Stablecoin - News, Opinion & Analysis

Stablecoin

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A stablecoin is a digital token that is pegged to a certain value, usually in a 1:1 ratio with a fiat currency like the US dollar. For example, the USD Coin (USDC) launched by Coinbase is backed by US Dollars in a 1:1 ratio. Most stablecoins in reality deviate from the $1 position ever so slightly, 

Most stablecoins are pegged to a fiat currency, with the US Dollar being a popular choice. However, some stablecoin ventures distinguish themselves by backing their stablecoins with other assets. 

An example of this kind of stablecoin is the well known MakerDAO ecosystem, which is a stablecoin ecosystem that consists of two tokens: the stablecoin DAI and the governance/utility token MKR. The stablecoins are backed by Collateralized Debt Positions which demand Ether as collateral. There is a complex mechanism in place to ensure that the token does not deviate from the $1 value.

Stablecoins have been ascending in popularity in discussion in 2019. This is largely because there is some consensus in the idea that stablecoins are effective in combating the volatility of the market. Since the value of these tokens remain stable, investors who use stablecoins do not have to worry as much about bear markets, and can use these tokens to make investments during these bear markets to gain profit.

As most stablecoins are pegged to fiat currency, there has been scrutiny on the finances of stablecoin issuers, who must confirm that they possess the reserves to back the total value of stablecoins. This increased scrutiny has led to calls for more audits and better transparency.


Stablecoin and Interpretive Letter 1174: U.S. banks will be able to use blockchain for transactions

9 Jan 2021 3 minute read 0 comments Michelangelo 96r

It would seem that America is making great strides regarding the use of cryptocurrencies. Since a few days in fact, according to what has been stated by the OCC (Office of the Comptroller of the Currency), banks will be able to take advantage of new...

UK Opens Consultation Regarding Stablecoins, Wants to Remain FinTech Leader

8 Jan 2021 1 minute read 11 comments Abhimanyu Krishnan

The United Kingdom’s treasury department, Her Majesty’s Treasury, has launched a consultation process for stablecoins with respect to their application in the national economy, according to an official document published in Jan. 2021. Saying that th...

Syscoin to be in the Limelight as Govt Agency OKs Stablecoins

7 Jan 2021 2 minute read 4 comments drlove

It is quite amazing to appreciate the foresight of the Syscoin development team had to not only focus on interoperability (Syscoin-Ethereum permissionless bridge), and level-2 masternodes providing scalability (zdag) in excess of 60K tps in realistic...

Ukraine to Develop its CBDC Infrastructure with Stellar

6 Jan 2021 1 minute read 4 comments Abhimanyu Krishnan

The Stellar Foundation announced on Jan. 4 that it had signed an agreement with the Ministry of Digital Transformation of Ukraine to establish a virtual assets ecosystem. The partnership will see the two bodies create a strategy for digital currenci...

Origin Dollar Relaunches After $7M Hack

6 Jan 2021 1 minute read 0 comments Abhimanyu Krishnan

Origin Protocol officially relaunched the Origin Dollar (OUSD) on Jan 6., opening deposits and yield gains to investors and featuring a strengthened protocol following a $7 million hack in Nov. 2020. Origin’s growth was setback by the hack, but the...

US Banking Regulator Tells Banks They Can Use Stablecoins for Payment Activities

5 Jan 2021 1 minute read 7 comments Abhimanyu Krishnan

The Office of the Comptroller of the Currency (OCC), part of the US Treasury, announced on Jan. 4 that banks could use stablecoins for payment activities.  The letter states that banks and thrift institutions can participate in independent node veri...

OpenDAO Stock and Real Estate Backed Stablecoin Will Launch Soon

2 Jan 2021 1 minute read 1 comment lucasc

UMA Protocol lets developers build synthetic assets - a special kind of digital token which follows the price of some other valuable asset. For the last 3 months, they've run a Yield Dollar to mint based on collateral with a time limit. They represen...

BUSD has been the most powerful stablecoin in 2020

1 Jan 2021 1 minute read 0 comments Makingdigital

Stablecoins have seen unstoppable growth this year 2020. Although USD Tether remains the most dominant, BUSD undoubtedly represents the lead. Usd Tether has increased its market capitalization by more than $ 12 billion. The pandemic that has characte...

Everything You Need to Know About Algorithmic Stablecoins

1 Jan 2021 4 minute read 4 comments AlucardLife

The new rave in defi right now is the algorithmic stablecoin. These are protocols that use a mix of monetary policies rather than a secured asset to maintain a stable peg. They seem very hard to understand, but the only thing you need to understand i...

Cryptocurrency portfolio and digital rewards - A new year's Eve story

31 Dec 2020 2 minute read 4 comments Heruvim78

Today i plan to talk about BlockFi, one of the main ways to save and be rewarded in crypto for my portfolio. Once upon a time, i used to keep all my crypto in my Coinbase account, getting nothing but extra fees everytime i tried to exchange the profi...