More Companies Are Moving Into Stablecoins
12 de septiembre, 2018
Tiempo estimado de lectura: 2 minutos
Stablecoins are crypto tokens that are backed by a fiat currency, such as the US dollar, so they can benefit from its stability.
This aims to make cryptos less risky, as they are not subject to the high volatility of conventional tokens, including Bitcoin. This week, two players announced plans to move into this field after being approved by the New York State Department of Financial Services (DYFS), the same regulator that grants bitLicenses to crypto exchanges in New York.
- Gemini. US-based crypto exchange Gemini has launched a stablecoin, dubbed Gemini dollar, built on the Ethereum network. Its goal is to enable fiat-based transactions 24/7, rather than just during usual business hours. The US dollars that correspond to the Gemini dollar will be held in a US bank, and they will be examined monthly to ensure that the stablecoin is accurately pegged to the fiat currency 1:1
- Paxos. US blockchain company Paxos has also built a stablecoin on the Ethereum network, named Paxos Standard, which is likewise pegged to the dollar 1:1. Paxos Standard is available for instantaneous global transaction settlement 24/7. The dollar deposits are held at four separate Federal Deposit Insurance Corporation (FDIC)-insured banking partners, and the stablecoin will be audited regularly by an undisclosed major auditor.
Ensuring the stablecoins are checked and audited on a regular basis is likely a good move to ensure consumer trust. Tether, which is arguably the most well-known stablecoin, became the subject of an investigation by the US Commodity Futures Trading Commission (CFTC) earlier this year, which sought to determine whether the company had enough dollars in reserve to back its tokens. It was later revealed that Tether does in fact have the necessary assets, but the fiasco resulted in a lot of negative publicity for the company. Such scrutiny would be even worse for a stablecoin that has yet to establish itself. As such, ensuring that their operations are checked on a regular basis will likely help the Gemini Dollar and the Paxos Standard to gain trust from investors. Additionally, both companies are registered as trust companies, meaning that they have a fiduciary responsibility to put customer needs ahead of their own, which will likely further boost confidence in the new stablecoins.
Fuente: Business Insider
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