Coinbase, Billionaire Peter Thiel Back New ‘Reserve’ Stablecoin

 Coinbase and Silicon Valley investor Peter Thiel are among over 40 groups, funds, and angel investors backing the latest addition to the cryptocurrency ecosystem’s stablecoin arsenal, a new stable token called Reserve, which  closed $5 million in its first round of fundingThe stablecoin, which is pegged 1:1 to the value of USD, is in the developmental stages with a team composed of 20 people including Google and OpenAI veterans and an advisory relationship with Patomak Global Advisors, led by former SEC Commissioner Paul Atkins.The team cites competing with failing fiat currencies as a project goal, identifying 16 countries where rapid deflation causes a significant loss of value and prevents people from saving effectively.Price instability in the cryptocurrency space is often referred to as one of the main elements preventing widespread adoption. While volatility is attractive for traders seeking to capitalize on major price swings, cryptocurrency is not seen as an effective medium to store value, pay for goods and services, or offer typical financial services such as credit loans. 

 There are already a number of stablecoins on the market, with the controversial Tether project currently dominating the space despite numerous controversies leading to skepticism that the project is fully backed by fiat collateral. Newcomer TrueUSD is rapidly gaining momentum as a contender in the fiat-backed stablecoin arena, with other decentralized forms of stablecoin also available such as eUSD from Havven.In Reserve’s case, the currency will be more than a stablecoin, with founder Freeman describing it as a full-stack open currency that is relatively stable in cryptocurrency that is “relatively stable” in purchasing power and private in limited amounts.The code will be open sourced sometime before launch with a decentralized protocol which will lock cryptocurrency assets in a smart contract called Vault. The team describes Reserve as decentralized with both external and self-generated backing, which is a hybrid approach. The backing, in this case, is a mixture of Reserve shares, which fulfill a similar function to segniorage shares as seen in Basis and Carbon, and external crypto-assets.Crypto-backing allows for full transparency as users can verify that the funds really are in place backing their stablecoin tokens, and also allows for decentralization. “We think that for a cryptocurrency to be truly censorship-resistant in the long term, it has to be decentralized,” Freeman told CCN.