Cryptocurrency 

Fiat-Backed Stablecoins ⁠— Attempt to Take the Best of Both Worlds

Stablecoins attempt to be fiat currencies among cryptos. They can be a medium of exchange, a means of storing value and a unit of account. Unlike other digital coins, stablecoins are tied to some kind of stable asset — such as the United States dollar, euro or even gold. Linking to such assets confirms the coin’s stability and mitigating the volatility of cryptocurrencies. Related: Stablecoins Explained With this type of a token, an equal amount of fiat currency should be stored by the issuing company to back the value of…

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Cryptocurrency 

Stablecoins Backed by Precious Metals — How Do They Work?

Cryptocurrencies are constantly subject to exchange rate fluctuations and are characterized by high price volatility. For making crypto money more useful and more stable, a special type was created: stablecoins. Related: Stablecoins, Explained Stablecoin is a cryptocurrency whose value is tied to some valuable asset. This asset could be fiat money, precious metals like gold and silver, oil or almost anything that has tangible value. The price of a stable cryptocurrency is formed in direct proportion to the established asset. An ideal stablecoin should perform three main functions: Act as…

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Bitcoin 

Biggest Problems With Stablecoins, Explained

5. Potentially, but there are hurdles that stand in the way. Earlier this year, Facebook unveiled plans for Libra — a stablecoin that would be pegged to a basket of assets — including major fiat currencies such as the U.S. dollar, yen, euro and pound. The social network has the vision of enabling its billions of users to send and receive money between each other — including across borders — potentially disrupting the remittances market. However, Mark Zuckerberg, the co-founder and CEO of Facebook, has had to slam the brakes on the…

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Cryptocurrency 

European Central Bank Policymaker Says Stablecoins Not Cause for Alarm

A European Central Bank (ECB) official has stated that users should be aware of the risks associated with the stablecoins use, but not to be alarmed. As Reuters reported on July 18, member of the ECB’s governing council and president of the Deutsche Bundesbank, Jens Weidmann said that stablecoins — digital currency designed to minimize price volatility by being pegged to another asset — offer users opportunities for prosperity, however users should be vigilant in regards of the associated risks. Weidmann delivered his comments at a news conference at a…

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Cryptocurrency 

Only 30% of Known Stablecoins Are Live and Operational

Only 66 stablecoins — 30% of total announced tokens — are actually live and operational, according to a study published by the blockchain research group Blockdata on June 26 The remaining 70%  are either still in development or have shut down entirely. Researchers from Blockdata believe that one consequence of this is that 2019–2020 may see a record high of new stablecoins going live, with 119 estimated to launch in 2019. Researchers also examined possible factors may have led to the closure of failed stablecoins. Failed stablecoins, according to the…

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Ethereum 

Binance and Paxos Just Made It Easier to Exchange Stablecoins for Fiat

The biggest crypto exchange by volume Binance and digital asset Trust company Paxos have integrated a new fiat deposit gateway on Binance’s flagship trading platform.  According to a press release published on June 26, the gateway will enable traders to exchange fiat currency for the PAX Standard (PAX) stablecoin on the Paxos platform via wire transfer. The amount will then be reflected directly as a PAX-denominated balance in their Binance accounts. The press release claims that the new fiat on-ramp will foster increased PAX liquidity on the exchange and thus…

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