Are StableCoins Cryptocurrencies’ Savior or their Undertaker?

Hidden behind the howls and cheers that accompanied the wild cryptocurrencies roller-coaster ride of 2018, a quieter trend was steadily growing. The stablecoin steady growth in 2018 is impressive. From the 30 stablecoin projects, including 9 live ones at the beginning of 2018, 2019 opens with over 160 stablecoin projects, 28 of which are live. The combined stablecoin market cap grew from around US$1.5 bn to US$ 2.7bn in the same period. Another point to further consolidate the potential for stablecoins is the latest update of the Texas Department of Banking’s Supervisory Memorandum — 1037 (“Guidance”) indicating that stablecoins pegged to sovereign currency and offer redemption rights to holders are now considered as having ”monetary value.”

Both cryptocurrencies and stablecoins are based on blockchain technology. Yet, unlike cryptocurrencies’ utility tokens, the value of which is directly linked to the growth or decline in use of the token, a stablecoin value is pegged to a stable real-world asset, from commodities to currencies.Another significant difference between cryptocurrencies and stable coins is that any stablecoin value has to be backed by assets held in reserve by the stablecoin issuer. This means that stablecoins are centralized by definition, as there has to be a central authority in charge of holding the backing assets, supervising the assets management and providing the documentation for audits.

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https://hackernoon.com/are-stablecoins-cryptocurrencies-savior-or-their-undertaker-861de0debea9?source=rss----3a8144eabfe3---4

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