Mike McGlone, senior commodity strategist at Bloomberg, is convinced that Bitcoin’s transition to digital gold will propel it to new all-time highs in 2022.
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.
The total supply for USDC on Ethereum has surpassed that of Tether, putting USDT in second place on Ethereum for the first time.5974
Crypto heavyweights including Three Arrows, DCG, Delphi Digital and Crypto.com Capital joined Hubble Protocol’s funding.3687
A new report from EY highlights the need for a policy change for banks to overcome business uncertainties regarding digital assets.9339
The Hong Kong Monetary Authority shared a list of eight questions to seek policy-related recommendations citing five possible regulatory outcomes — no action, opt-in regime, risk-based regime, catch-all regime and blanket ban.6381
Ark Invest's latest foray into the crypto sector focuses on stablecoin issuer Circle, which announced plans to merge with SPAC Concord Acquisition Corp.10080
Altcoins can rally for an infinite number of reasons, but some price spikes are more historically similar than others.2157
Tether has not issued a statement giving a specific reason for blacklisting three addresses, but it has done so before to comply with law enforcement and aid exchanges after cyber attacks.16469
Hong Kong’s central bank is inviting global stablecoin operators to respond to its proposed rules.2453
The pilot version of China’s official digital yuan wallet app has become the most downloaded app in local mobile app stores.4346
Bahrain’s central bank initially announced its JPM Coin trial in May 2021.6265
The development of an in-house stablecoin was first discovered in the source code of Paypal’s iPhone app by developer Steve Moser.18030
The threat of stablecoin regulation and USDT and USDC centralization are making decentralized stablecoins like MIM, FRAX and UST attractive to DeFi investors.10963
Terra would provide over $139 million in UST and LUNA to several DeFi projects on Ethereum, Solana and Polygon for at least the next six months.13767
The company is pushing new use cases for blockchain payments through its partnerships with Bitso and Stellar Development Foundation.4189