Libra gets another member as it strives to have 100 entities on board.
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.
Dapper Labs has partnered with its second major stablecoin this week, announcing the integration of BUSD for developers building on its Flow blockchain.4068
Tether supply surges to $15 billion but it could still be a house of cards2563
The rapidly growing market cap of Binance’s BUSD stablecoin shows the exchange is taking serious steps to become a major DeFi contender.3958
With government agencies getting more savvy at tracing blockchain transactions, laws like the EU’s GDPR may play a role.9710
Banque de France Governor François Villeroy de Galhau warned about the threat of "Big Tech" stablecoins.13604
Yearn Finance is launching a MakerDAO like stablecoin lending protocol with no governance token.6030
Despite stablecoins posting triple-digit market cap growth this year, competition from projects backed by major financial and tech corporations is on the horizon.6350
The asset's new multichain partner makes it so.13297
Ever wanted to yield farm gold, silver or oil?6828
‘DeFi yields and interest rates are clearly a vacuum sucking in a lot of stablecoins,’ says Coin Metrics’ Nic Carter.7970
Cryptocurrencies like Bitcoin don't quite convince Bailey, but he sees a lot of potential for stablecoins.12554
The Turkish lira-backed stablecoin BiLira is now open for trading on cryptocurrency exchange Bittrex Global.6751
The digital Swiss franc issuer is now licensed as a "digital asset trading facility."14977
But XRP isn’t competing with Tether.11970