Besides securing approval from Swiss regulators, Diem seems likely to face opposition from government regulators in many countries.
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.
Stablecorp CEO Jean Desgagne said VersaBank's digital currency was intended to provide an alternative to concerns over volatility and security in crypto markets.24988
Polychain Capital has bet on a new decentralized finance exchange protocol looking to boost the adoption of stablecoins in DeFi.6346
The European Central Bank has demanded veto power from lawmakers in the European Union over private stablecoin projects like Diem.6044
The RAI stablecoin will attempt to bring stability to DeFi markets with the long-term goal of becoming a stable global reserve asset not tied to any nation’s currency.12314
Venus protocol becomes the top-ranked DeFi platform on the Binance Smart Chain as XVS price and the total value locked in the platform reach new highs.26423
Amid much fanfare, many algorithmic stablecoins have not been stable. Is the problem intractable, or it's the just the algorithms that aren't good enough?16959
Fireblocks and First Digital Asset Group have developed a seamless connection to Diem, allowing financial institutions to access the emerging payment network. The platform is still awaiting regulatory approval before it can launch.14078
A negative premium implies that accumulation will last a little longer, meaning that $50,000 as support may have to wait too.31622
Algorand rallied to a multi-year high after the network emerged as a possible choice for central bank digital currencies and the team revealed its DeFi plans.31924
Mastercard will allow its almost one billion users to spend cryptocurrencies at more 30 million merchants, although it hasn’t specified which coins will be supported.32412
The Canadian central bank would be a better steward of financial data than private stablecoin issuers, according to one deputy governor.7748
The Terra Protocol is an up-and-coming crypto platform for DeFi and payment projects, spurred on by working products and a growing audience for DApps based on its technology.11694
USD Coin continues to capture stablecoin market share, with Tether’s stable token dominance falling below 75% for the first time ever.7175
The payments giant is bullish on stablecoins, but may be overlooking the potential of DeFi38132