[New Stablecoin] An Unnamed stablecoin, will the AUD crypto learn from Tether’s mistake?
Emparta, a blockchain employment platform, and domestic crypto exchange Bit Trade have announced their plan to launch a new stablecoin pegged to the Australian dollar in 2019.
The Tether Controversy
Amid the Tether controversy, opinions on stablecoins are divided. Tether is the second most traded coin, behind Bitcoin, and was pegged to the US dollar on a one to one ratio. A lack of transparency of Tether’s USD reserves sparked concerns concerning the potential redeemability of the stablecoin.
Over the last year, the company was unable to provide a full audit certified by a recognized third parties to appease the tensions, further increasing fears that it might not have enough funds in reserve to cover all of the coins in circulation. This culminated with the “unpegging” of Tether, when the coin lost 10% of its value in a matter of days; changing the perception many had over the stability from which stablecoins were named.
Will this new, yet unnamed, stablecoin repeat the same mistakes or will they learn from it, transcend, and revolutionize today’s salary transfers?
What uses for the new Stablecoin?
The project, started by Emparta, plans to allow employers to pay their employees in crypto, with a focus on oversea workers, which would provide the same benefits cryptocurrencies do, namely seamless cross-border payment with lower fees. The workers would then be able to immediately either send the coins back to their family or burn the coins and get their equivalent back in AUD.
Another feature crypto traders appreciate in stablecoins is the ability to exchange their volatile coins, say BTC, at any time with another pegged coin without having to go through a fiat currency.
The last advantage stablecoins hold over other, traditionally more volatile, coins is the potential use these coins might have of holding real world value and be used to interact with merchants e.g buy clothes.
The Main difference with Tether
Contrary to Tether, The new coin would be redeemable on demand, with its first reserve based in Australia, which should reduce concerns over its solvability as anyone could exchange back to AUD at any time.
This new coin is just one among the 57 newly issued, or still in development, stablecoins with many calling this phenomenon the “stablecoin invasion”. Will stablecoins become the norm and be used in our daily lives or is this just wishful thinking? Let us know what you think in the comments below.
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