The co-founder of a Melbourne-based Bitcoin exchange has said that stablecoins are the “craze right now,” with money and expertise moving toward it.
Rising Interest in Stablecoins
Asher Tan is one of the founders of CoinJar, a Bitcoin exchange based in Melbourne.
Speaking in an interview with the Financial Review, he talked about the rise of stablecoins.
The interesting thing right now, what’s on everyone’s lips, is what you call a stablecoin. A stablecoin is a coin pegged to a currency, usually the U.S. dollar. It’s a craze right now. […] It helps you transfer money around the crypto ecosystem at a stable rate. But there’s a whole lot of applications or use-cases that could come out of it.
He went on to state that even though the concept of stablecoins has been around for some time, it’s only now money and expertise are flocking to it.
In London I see a lot of finance people getting into it. People with 10, 20 years of forex experience are trying their hand at it. […] It’s drawing a lot of people from traditional financial circles, just because it’s interesting, it’s intriguing, there’s a lot of upside to it.
The most popular stablecoin is Tether, which is supposed to be backed by the U.S. dollar, with one Tether valued at $1. However, Tether has come under increasing criticism, with many questioning it. At the time of publishing, the price of Tether $0.98, according to CoinMarketCap.
Yet, while Tether is the first one to gain interest, others have since joined the market.
In September, it was reported that the Winklevoss twins had received New York state approval to launch the Gemini Dollar, a U.S.-backed dollar cryptocurrency.
IBM is also considering joining the race. The multinational technology company is looking into a cryptocurrency that’s tied to the U.S. dollar, which would rely on a platform created by Stellar.
Paxos, the company behind the itBit crypto exchange, also received permission from the New York Department of Financial Services (NYDFS) for their U.S. dollar-backed Paxos Standard cryptocurrency.
Goldman Sachs-backed Circle has also released its own stablecoin. The USD Coin is backed by the U.S. dollar as well.
These are just a few examples of stablecoins. However, they show the increasing interest the market is showing it, proving, as Tan says, that they are the craze right now.
What do you think of stablecoins? Are they the latest craze or are they here to stay? Let us know in the comments below.
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