Crypto lending platform Celsius Network has listed startup Saga’s SGA stabilized asset, unlocking the potential for token holders to earn interest.
“Saga has partnered with leading cryptocurrency interest income platform, Celsius Network,” Saga founder Ido Sadeh Man told Cointelegraph.
The collaboration and listing means “users can both preserve their assets’ value with SGA’s proven stabilization mechanism (the IMF's SDR, a basket of currencies designed to offset currency fluctuations), as well as earn attractive interest through the Celsius network,” Man explained.
Saga does not call itself a "stablecoin"
Although Saga touts SGA as a stable asset, the company does not officially put its token under the stablecoin umbrella. SGA holds value based on a basket of global currencies.
The blockchain-based SGA token derives its price from an asset known as SDR — a multi-currency backed asset the International Monetary Fund, or IMF, developed in 1969.
SGA holders can earn interest
The Celsius listing allows SGA holders to garner as much as 9.9% APR interest, while the collaboration as a whole also shows a vote of confidence for Saga and its global vision, Man explained.
Additionally, “SGA holders will also be able to borrow cash or stablecoins against their SGA at rates as low as 3.45% and use their assets as collateral.”
Stablecoins also need regulation
Such an asset also comes with regulatory considerations as the world saw with Libra’s stablecoin efforts.
“Compliance is a central pillar of Saga,” Man said. “It’s why, when we couldn’t find an onboarding program to satisfy our rigorous KYC procedures, we built our own,” he added, referring to Know Your Customer regulations.
Saga’s parameters even fit in line with the European Union’s stringent 5th Anti-Money Laundering Directive, or 5AMLD, prior to the regulatory movement’s introduction. “We operate only where we can assert complete compliance, which is why we do not operate in the U.S.,” Man said.
Man noted the importance of high-level regulatory compliance as part of expanding cryptocurrency’s usage.
“We selected the U.K. as our country of legal registration thanks to the regulator being open to building up a dialogue around how we can safely and legally implement cryptocurrency,” Man said. “We are proud that we have been in full operation since December 2019, and have not met with any legal challenges in this time.”
Regulation has been a hurdle many cryptocurrencies have stumbled upon over the past three years specifically. Headlines continue flowing in, showing government compliance may be unavoidable for many crypto solutions.