In the past, the cryptocurrency industry was regarded as a fluke, an uncertain entity that was not destined to live long. Analysts and digital technology researchers were divided on the future of the cryptocurrency industry. It was termed a passing fancy; an inconsequential currency but now, the opposite seems to be the case. The cryptocurrency industry has shown that it has great potential and the world has started paying attention. Realizing the strength of the cryptocurrency and the possibility of it replacing the traditional financial system and structure, investors and institutions have woken up to the possibility of a world governed by the cryptocurrency market.
Cryptocurrency News Today – Cryptocurrency Latest Update – Stablecoins Will Pose A Threat To Central Banks
Facebook’s Libra project brought the fact that the digital currency could soon replace traditional fiat to the spotlight. The Facebook Libra project, in which a group of companies operating different currencies will maintain a stable digital token that will have redeemable value brought to the public the concept of ‘stablecoins’. The aftermath of the debate regarding Facebook Libra has brought a flood of competing stablecoins into the financial market. All indications from analysts show that Asia might be ground zero for the battle for supremacy of the stablecoins with China taking center stage.
China’s central bank’s digital currency may not be a ‘stablecoin’ in the technical term as its value is beyond a fiat currency benchmark. China’s move will see other entities, both public and private coming out with their digital currencies. China’s central bank-backed digital currency and other stablecoins could potentially solve one of the major challenges facing smart contracts and blockchain projects. The sole challenge of designers of blockchain solutions has been the choice of payment mechanism. The designers had two choices; they could integrate with the cryptocurrency assets that can be both volatile and unpredictable or they can use the existing banking system that is bogged down with procedures.
The Place Of Stablecoins In The Economy
With China’s digital currency move, other countries would be forced to join the bandwagon or be pushed to the curb and become irrelevant in international trade. This shift in perception of the cryptocurrency can be seen as former cryptocurrency antagonists have made complete turnarounds. One such case is Agustin Carstens, who is the head of the Bank of International Settlements. He had previously dismissed the possibility of the cryptocurrency industry becoming a strong player in the international economy but now believes that digital currency is here to stay. Cryptocurrency latest update shows that the market now seems ripe for the emergence of the stablecoin as an alternative in the upcoming currency war.
Though China’s forage into the digital currency world may seem prominent, fears of the country’s surveillance of its citizens may be the opportunity for stablecoins from other cryptocurrency developers that are not affiliated with government bodies. These stablecoin developers would have to assure operating better security than Facebook Libra to be relevant. The stablecoin market seems to be categorized into two groups; the stablecoins backed by reserves and the algorithmic stablecoins.
Bitcoin (BTC) Price Today – BTC / USD
Tether USDT once ruled the reserved-backed stablecoin market but when doubts about its reserve-management systems arose, other coins with tighter regulated entities took over. The leader of the algorithmic stablecoins happens to be Dai, a token that’s based on collateralized ether loans.