One of the most popular cryptocurrency products released in 2018 are stable currencies, which are widely advertised as having all the advantages of cryptocurrencies, less volatility. Although they seem a practical product, some critics say they pose too many problems to be widely adopted.
Surrounding controversy Tether Sparks Frenzy
The frenzy of the stable currency began when investors lost confidence in ethics and practices surrounding the most used stable currency: Tether. In January of this year, reports emerged stating that Tether (USDT) was a fiction, used to support the price of Bitcoin.
The stable currency, which is presumably supported by US dollars 1: 1, is a refuge commonly used for cryptocurrency investors who seek to escape the constant volatility associated with many cryptocurrencies. It is used as an exchange pair on many massive exchanges and allows them to have a dollar substitute without having to undergo the scrutiny and regulations associated with the banking relationships necessary to allow a fiat onramp.
The controversy surrounding this cryptocurrency stems from the claims that the USDT was "printed" to support the cryptocurrency markets, and that there is no equal amount of USD as there are Tethers.
These fears perpetuated at the start of this year, when the Commision for Commodities Trading in the United States (CFTC) sent citations to Tether, causing a pervasive fear in the crypto markets, CNBC reported to February. Despite this, there is no important news about Tether right now, and the fears about how they could have manipulated the markets have largely eased.
Offers of stable coins Skyrocket
In response to the tremendous media storm that followed everything that happened in Tether, many companies hastened to create alternatives to Tether and even alternatives to Bitcoin, which provide the benefits of digital currency without the volatility.
The stable coins are being processed by some large companies, including IBM, Circle, Gemini and others, all with slightly different characteristics that stand out from the rest.
Although most of the steady currencies are backed by, or denominated in, USD, a British startup recently announced the release of a "crypt pound" that tracks the value of the Pound, reports Business Insider. Just like Tether, the new product will be supported by British pound reserves in a verifiable bank account.
Another type of stable currency that increases in popularity is those borne by metals. An asset management company based in Switzerland has recently announced that it is releasing a cryptocurrency token – called a Tiberius currency – that is backed by a basket of multiple metals, including copper, gold and platinum, among others.
This type of stable currency could be more popular for investors than those with securities support, mainly because it combines cryptocurrency technology with the support of physical assets.
Investors in Tiberius Coin will be able to trade their token for physical commodities, with a minimum exchange rate of $ 10,000 due to the raw materials held by the ton rather than the grams.
Since many of these stable currencies have not yet been released to the markets, it is unclear whether the exchanges and investors will use them or whether they will stick to Tether, which currently dominates the markets.
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