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.
Stablecoins have seen a 17-month decline as investors move to traditional assets. What needs to happen for the exodus to stop?
Stablecoin exodus: Why are investors fleeing crypto’s safe haven?
Francisco Rodrigues
Markets News
Bitcoin’s 150% gains over the last two years in Argentine pesos is no match for the country’s 300% inflation in the period.
Bitcoin blasts past its 2021 all-time high in Argentina, but hyperinflation outpaces gains
Marcel Pechman
A Binance executive said the cryptocurrency exchange plans to delist stablecoins in the European market by June 2024 in order to comply with standards laid out ...
Binance plans to delist stablecoins in Europe, citing MiCA compliance
Savannah Fortis
Tether said the new loans were made at the request of some of its long-standing partners, and it plans to cut it down to zero by 2024.
Tether stablecoin loans rise in 2023 despite downsizing announcement in 2022
Prashant Jha
The payments platform said PayPal USD will be “rolling out fully in the coming weeks” after announcing its launch on Venmo.
PayPal rolls out PYUSD stablecoin to Venmo users
Turner Wright
Polkadot USDC users should not deposit XCM-transferred USDC from non-Polkadot Asset Hub parachains, Circle has warned.
Circle launches USDC stablecoin on Polkadot Asset Hub
Helen Partz
Coinbase’s CEO has become the latest ally of the DeFi space, calling for apt regulations of the ecosystem rather than enforcement action by regulatory bodies.
Coinbase CEO stands up for DeFi, Polygon says $1B ZK-rollup paying off: Finance Redefined
Prashant Jha
MakerDAO’s Rune Christensen says appropriate regulation will see stablecoins become mainstream, but the real opportunity is in decentralized stablecoins.
Decentralized stablecoins could dominate crypto: MakerDAO founder
Martin Young

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