Stablecoin

A "stablecoin" is a cryptocurrency that is pegged to, or interchangeable with the value of an asset like gold or fiat currency. For example, Tether, Basis, Gemini Dollar, Paxos Standard and Petro are all stablecoins.[1][2]

History

The first stablecoin was Tether - originally called "Realcoin" - which launched in 2014.[3]

The concept of stablecoin was tarnished somewhat in October 2018 when suspicions about Tether's integrity led to a fall in price. Tether's price decline to $.87 from its $1 "peg" on October 16, 2018 was approximately contemporaneous with a sharp increase in the value of the Gemini Dollar to $1.19 from its $1 "peg."[4][5]

In a statement published on its website on December 13, 2018, the issuer of Basis, Intangible Labs, announced that it was returning investor monies and shutting down Basis stating, "Unfortunately, having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis."[6]

In October 2019, Representative Sylvia Garcia, a Texas Democrat, introduced a bill to regulate managed stablecoins called the “Stablecoins Are Securities Act of 2019.” [7] Observers at the time noted that it was likely targeted at Facebook's Libra, rather than at stablecoins like Tether.[8] At about the same time, Facebook's David Marcus told a banking seminar that it was considering using single currency stablecoins instead of creating a unique Libra coin.[9]

References

  1. What's The Difference Between A Software Product And A Platform?. Forbes.
  2. Maduro’s Petro cryptocurrency will be an official currency in Venezuela – like the Bolivar. The Next Web.
  3. Brock Pierce Announces Dollar-backed Cryptocurrency 'Realcoin'. Coindesk.
  4. Crypto Markets Roiled as Traders Question Tether's Dollar Peg. Bloomberg.
  5. Winklevoss-Backed Stablecoin Soars Above $1 as Tether's Market Cap Plunges. Coindesk.
  6. Letter to Basis Community. Intangible Labs.
  7. US Lawmaker Introduces Bill Classifying Stablecoins as Securities. CoinDesk.
  8. ‘Stablecoins Are The New Bitcoin’ In Congress. Forbes.
  9. Facebook open to currency-pegged stablecoins for Libra project. Reuters.
Last modified on 12 May 2021, at 01:54