Crypto Week in Review: Stablecoins Continue to Gain Traction
In Voyager CEO Steve Ehrlich’s 2020 crypto market predictions, he bet on stablecoins, and just weeks into the new year, his odds are looking pretty good.
Stablecoins are gaining traction at every end of the spectrum – from the European Central Bank to Pornhub, which announced Thursday that it would accept payments in Tether after PayPal abruptly stopped their service.
Stablecoins share many of the benefits of Bitcoin and other cryptocurrencies without the volatility because they’re pegged 1:1 with stable assets like the U.S. Dollar and the British Pound. They’re borderless, cost-efficient, and increase transaction speeds, making them appealing to banks, merchants, asset managers, and many other types of businesses.
This week, Bloomberg reported that stablecoins like Tether and USDC are gaining popularity among importers and exporters in Asia and Europe. According to the source, transactions with suppliers and vendors already reach up to $10 million a day at QCP Capital, a Singapore-based digital trading firm. At B2BinPay, a digital payment provider out of Moscow, millions of dollars worth of transactions are coming in monthly and increasing daily.
Different than coins backed by currencies like USDC, businesses are also launching stablecoins that’s value is tied to various assets and investment vehicles. For example, WisdomTree, which manages close to $63 billion in assets, is reportedly working to create its own stablecoin, which would be similar to an ETF backed by dollar-denominated assets like U.S. Treasury bonds.
In a press release Thursday, Tether revealed a new stablecoin, Tether Gold (XAU₮). Each XAU₮ represents one troy fine ounce of gold on a specific gold bar. The new coin provides investors with the benefits of gold and digital assets, without the drawbacks of physically holding the precious metal.
With merchants around the world seeking alternative financial solutions, but unable to take on the volatility risk of Bitcoin, stablecoins are emerging as a vital asset in the growing digital economy. While lacking some of the benefits of decentralized cryptocurrencies, stablecoins will go a long way in spreading mass adoption by utilizing the blockchain to sell real-world goods, services, and commodities.
The World Economic Forum yesterday announced a new framework to guide central banks in creating central bank-issued digital currencies. Read more.
The torch is a digital game first ignited in January 2019 by pseudonymous bitcoin enthusiast Hodlonaut, known for his Twitter avatar of a cat in a spacesuit. Each “torchbearer” sends a tiny amount of bitcoin to the next. A key rule is to add a little bit more money to the payment each time it moves to someone new. Read more.
“Physical money is out,” said B.S. Kohli, an economic advisor to the head of the Indian state of Punjab. Mothanna Gharaibeh, Jordan’s minister of digital economy and entrepreneurship, agreed. Read more.
In a Medium post Wednesday, Jiang Zhuoer, CEO of mining pool BTC.TOP, said that a group of some of the largest bitcoin cash mining pools were preparing to soft fork the network to implement a “short-term donation plan” that would cut block rewards by 12.5 percent in order to fund network development. Read more.
Malta-based sports blockchain venture Chiliz is launching a cryptocurrency exchange for sports and entertainment tokens. Read more.
Paxful, the peer-to-peer bitcoin marketplace, announced today that work has commenced on a third school in Africa, funded by its #BuiltwithBitcoin initiative. Read more.
SportsCastr—a live-streaming company that rewards its users in cryptocurrency for their sports commentary—today announced a partnership with FanWide, a platform that connects sports fans with local watch parties. Read more.
Ripple CEO Brad Garlinghouse predicts that initial public offerings (IPOs) will become more prevalent in the cryptocurrency and blockchain space in 2020. Read more.