Stable currencies are all the rage as of late. Given the price volatility of many mainstream cryptocurrencies such as bitcoin (BTC), Ethereum (ETH), Litecoin (LTC) and bitcoin cash (BCH), some are looking for new ways to ensure their safety while also investing in digital currencies, and now it looks like stable currencies are about to get a big regulatory boost.
Could a New Bill Make Stable Currencies Mainstream?
A new bill has been opened in Congress called the “Stable Coins Are Securities Act of 2019.” The bill seeks to ensure that stable coins are regulated by the Securities and Exchange Commission (SEC). This is a major jump from the step taken by Senator Joe Manchin – a democrat from West Virginia – when he asked that bitcoin be banned in 2014. Now, not only has Congress seemingly accepted the presence of digital currencies – they’re also looking to ensure the safety of those who use them.
Stable currencies are digital coins that have been tied to fiat money. Whether that fiat is the U.S. dollar, the euro, the yen or the Chinese yuan, they are all attached to standard cash so that in the event of economic strife, they manage to retain their value. These currencies are very popular for two reasons; the first is that they protect one’s wealth from being depleted. The second is that do not experience price falls the way bitcoin does.
This has proven to be a serious problem, especially as of late. Bitcoin dropped to the low $8,000 range in late September after Bakkt – the institutional crypto trading platform owned by the Intercontinental Exchange (ICE) – failed to make a serious debut. From there, things just got worse when Mark Zuckerberg was scheduled to speak before a congressional committee regarding Libra and Facebook’s plans for the digital currency project.
However, at press time, bitcoin has managed to expand its price and is now experiencing bullish behavior like it hasn’t seen in over a month. BTC is trading for just shy of $10,000, meaning it’s earned all its previous gains back over the course of just a few days. Not bad, eh?
Doing What BTC Can’t
Still, however, there’s no way to know if bitcoin could ever drop like that again. Of course, everything says that it could (or even will). While we’d like to think otherwise – that perhaps bitcoin’s strength has pummeled the bears into permanent submission – our better judgement tells us that even though it’s having a strong week, bitcoin remains as vulnerable as ever.
Thus, many enthusiasts and traders are looking to keep themselves protected in the future, and this is where stable coins come in. Among the most popular stable currencies active today include Tether (USDT), Coinbase’s USD Coin (USDC), and the Gemini Exchange’s Gemini Dollar (GUSD).