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Stablecoins Series – Expedition from USDT to JPM Coin and speculated Facebook’s coin

The prime objective and prerequisite of cryptocurrency invention during last decade’s recession (in 2008-09) was to establish fidelity among investors’ class and to provide the anonymous method of mobilizing funds efficiently, ever since then it’s been signified as ‘digital gold’. With an objective of fostering the anonymity, a Japanese had to invent something which did not exist, this was possible when Blockchain technology, the digital ledger of constant Bitcoin transactions, was developed. But, owing to the rising scams in the crypto-industry in the recent past, the concept of Stable-coin has emerged and the trend of such coins has been eye-catchy for now. In just six months’ time or so, the concept of stable coins has evolved.

The next swing of stable coin craze has been observed at the beginning of 2019, but the stable coin today already differs from what it was last year.

What are stable coins? A stable coin is a coin pegged to a fiat currency, usually the US dollar, to maintain a stable value. As the exchange rates of fiat currencies are relatively stable and less volatile, stable coins allow for practical usages of cryptocurrencies in everyday life.

Why do we need stable coins? What is their value?

This is a very important, yet seldom-addressed question. The stable coin is a gateway to digital asset investment.

Tether (USDT) was launched. A San-Francisco based crypto exchange, Kraken has responded to a recent article by Bloomberg that argues Tether (USDT) is being manipulated on their exchange. Kraken took a dig at the article’s complex headline and insinuated that the article was written to have an effect on the price of futures trading.

Well, as time progressed, renowned multinational IT giant like, IBM processed overseas payments on the Stellar network deploying Stronghold USD which has been a stable coin pegged to the U.S. dollar.

The stable coin frenzy initially took place when investors’ group lost trust in the principles and practices around the most widely used stable coin, ‘Tether’. During earlier this year, reports surfaced claiming that Tether (USDT), was a fake instrument, being used to prop up Bitcoin’s price. They ensure a secured bridge between Crypto-assets and fiat currencies, where the platform functions as an escrow between two parties.

The prices of crypto-assets are subject to relatively high volatility, especially during the market is sensing bearish sentiments. If traders are reliant to take the risk of price turbulence or cash out, or when exchanges do not support fiat trading pairs, the essence of trading stable coins seems to be the solution.

The spotlight on the trending topic of stable coins last year intended to resolve the trading loopholes of crypto avenues. A reliable stable coin has to have a stable fundamentals and robust mechanism to ensure price stability so that it would be influential among the mass investment communities.

J.P. Morgan has made an official announcement about its digital currency initiative ‘JPM’s Coin’ and divulged about its digital coin payment.

This is Ethereum-based stable coin which is the extension of JPMorgan’s blockchain initiative, Quorum, an enterprise-level distributed ledger protocol forked from the Go Ethereum client.

In yet another instance, the renowned social media company Facebook doesn’t seem to be abstaining itself from a buzz world. They also seem to be testing their luck in blockchain or crypto-universe, the social media giant is intending to establish blockchain technology team. As a result, they are seeking techno-savvies to develop blockchain ecosystem, as per Facebook’s official careers page so that Facebook could incept a stable coin through which their clients can transfer money via WhatsApp.

Profoundly, stable coins in the beginning stage was a product that was quickly developed to answer the demand for digital asset trading, as well as to solve the controversies surrounding fiat trading regulations. We could foresee the prospects of stable coins when all countries could be clear and liberal in their regulations.

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