Swiss bank Dukascopy is developing its own ERC-20 stable currency. The coin will be built on the Ethereum blockchain and will be tied to the euro, the U.S. dollar and the Swiss franc.
Swiss Banks Come First; Now Comes Swiss Crypto
Known as Dukascash, the currency will be tested and attached to additional forms of fiat granted its user base shows enough demand. According to the asset’s whitepaper:
The initial Dukascash tokens tranches of roughly CHF 10 million or equivalent, and each base currency will be issued and initially kept by the Bank as ‘unreleased’ tokens. Additional Dukascash tokens will be issued in tranches, depending upon client demand. Small portions (up to CHF 100,000) of unreleased Dukascash tokens will then be released in favor of the bank to enable it to sell Dukascash tokens to clients.
Stable currencies have been all the rage for more than a year. Initially, the coins were built to give investors a chance to put their money into crypto without having to worry about the volatility or price swings that typically strike mainstream forms of digital coins such as Ethereum, bitcoin and EOS. While bitcoin has been doing quite well as of late, it is still vulnerable to sudden (and unexplainable) price drops, such as what occurred during yesterday’s early morning hours.
In that time alone, bitcoin lost more than $3,000 from its previous price, falling from around $13,600 to just over $10,400. At press time, however, it has since jumped back up to about $11,800.
The idea behind stable currencies is that forms of crypto will be tied to less volatile, more stable assets such as USD or gold, giving the crypto in question less of an opportunity to experience price falls and providing investors with more peace of mind in the process.
This is both a strength and a weakness. On one hand, traders have less chances to lose their money, but granted cryptocurrencies ever strike bigger numbers, stable currencies, which are designed more to “remain as they are,” probably won’t join in, meaning investors aren’t going to earn much either.
Is Tether the Culprit Behind Bitcoin’s Price Spikes?
In addition, there are still certain aspects of stable coins that are either confusing or difficult to understand. Recently, a report emerged suggesting that tether was still responsible for bitcoin’s meteoric price rise, which has been ongoing since early April. Tether’s infamy began roughly one year ago when Texas finance professor John Griffin submitted a document that said tether had potentially manipulated the bitcoin price in 2017 during its first serious rally.
The sentiment now, according to some crypto skeptics, is that this is still occurring, yet other reports have emerged stating that bitcoin’s price rises have more to do with general market trends than they do with manipulation, and that this rally is somehow “sturdier.”