While CBDCs might be the best option for those nations with existent currencies and mature banks, private stablecoins might help less advanced economies.
Stablecoin News
One of the hindrances to mainstream cryptocurrency adoption is price volatility, as these assets are freely traded in the open market without central administrators tasked with maintaining price stability. The anticipation of potential losses and gains has hindered cryptocurrency’s use as a medium of exchange. Stablecoins, however, are cryptocurrencies designed to maintain a stable value over time, making them ideal for commercial transactions.
The introduction of stablecoins in the cryptocurrency market ushered in a new wave of liquidity, as exchanges were able to provide trading pairs with tokens representing traditional fiat currencies.
Stablecoin design takes many different forms, each with its own tradeoffs:
- Reserve-backed stablecoins: Cryptocurrencies pegged to the value of a fiat currency held in reserve by a company or consortium. E.g., Tether (USDT), USD Coin (USDC) and Paxos Standard (PAX).
- Collateralized stablecoins: Tokens backed by other cryptocurrencies that retain a one-to-one value with a fiat currency through over-collateralization to absorb potential volatility of the underlying assets. E.g., Dai and BitUSD.
- Algorithmic (seigniorage supply) stablecoins: Rather than using a reserve or collateralization to maintain a stable value, these stablecoins are facilitated through an automated expansion and contraction of the monetary supply, emulating the role of central banks in the fiat economy. E.g., Basis.
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Solana flipped Ethereum in weekly stablecoin transfer volume as investors chase after yield, airdrops and high returns from the memecoin frenzy.
2295Iceland’s prime minister reportedly wants to reallocate renewable energy away from crypto miners, a venture capital firm is raising $100 million for crypto startups, and more.
13217In February, Tron founder Justin Sun announced it was working on a Bitcoin layer-2 solution to intertwine its tokens with the Bitcoin network.
4242The entire crypto market tumbled today as Bitcoin price dropped below $63,000 and large-cap altcoins sold off.
10907Only EUR and USDC trading pairs will be supported on the platform in the EU area going forward, according to the message.
9885The European Parliament granted final approval to the European Union’s artificial intelligence law, one of the world’s first set of comprehensive AI regulations.
3843The funding rate for Bitcoin perpetual futures has been reset after $370 million in contracts was liquidated. Is that a good sign?
19555Mehen Finance planned to launch USDM in early 2023 but saw delays after crypto-friendly banks shuttered in 2023 and its banking partner went to work with Circle.
7354After a monstrous rally, the BTC price is showing signs of cooling off, with altcoins quickly following suit.
7034This regulatory framework for stablecoins results from a joint collaboration between the European Banking Authority and the European Securities and Markets Authority.
4421Binance will delist the COMP/TUSD, EDU/TUSD and PENDLE/TUSD trading pairs on March 15 at 3:00 am UTC.
2219The U.S. Attorney’s Office says this is one of the first times the U.S. has recovered USDT from an unhosted digital currency wallet.
5729Tether has entered a collaboration with Celo to enable “sub-cent transaction fees” for USDT and facilitate feasible microtransactions.
4862The digital euro intends to be the next evolution of the European currency, but before its inception, it has already caused division in Europe.
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