There are lots of interesting stablecoins out there, but a handful stands out in my mind. In particular, several stablecoins and stablecoin proposals stand out from the crowd.
Stablecoins are spreading like weeds these days. For example, the GMO Internet Group estimates there are 23 active stablecoins in the world’s markets. In addition, there could be another 24 stablecoins on the drawing board.
Some interesting stablecoins and stablecoin proposals you should investigate include:
OKCoin–the Yuan Stablecoin
OKCoin; a global digital asset exchange headed by Star Xu, plans to launch a Yuan-backed stablecoin, The Bitcoinist claims. Importantly, the yuan is the fiat currency of the People’s Republic of China.
Notably, analysts at Standard Chartered Bank think China’s Gross Domestic Product (GDP) will exceed America’s next year. Thus, you could buy a piece of the world’s biggest economy with a Yuan stablecoin. Moreover, The Visual Capitalist predicts China’s GDP could be more than double America’s by 2030.
Additionally, a yuan stablecoin could have high-level support. To explain, the People’s Bank of China (PBOC) is researching the possibility of creating a Yuan-stablecoin, Crypostate reports. To clarify, the PBOC is China’s central bank.
The Gemini Dollar (GUSD)
The Gemini Dollar (GUSD) is an Ethereum request for comment (ERC20) stablecoin created by the infamous Winklevoss Twins’ Gemini Trust. Impressively, they trade the Gemini Dollar on several large cryptocurrency exchanges.
In particular, a state government in the United States regulates the Gemini Dollar. Specifically, the New York State Department of Financial Services (NYDFS) approved the Gemini Dollar, Fortune reports.
However, there is no evidence America’s national financial regulators like the Securities and Exchange Commission (SEC) regulate or oversee the GUSD. To clarify, under America’s federal system, both the state and national governments regulate equities and securities.
On the other hand, America’s most important state financial regulator the NYDFS regulates the Gemini Dollar. The NYDFS is influential because Wall Street and the headquarters of most large US financial institutions are in New York City.
State Street Enters the Stablecoin Business
I think the Gemini Dollar is one of the most interesting stablecoins because they designed it for trading rather currency.
Signficantly, the US exchange-traded fund (ETF) giant State Street (NYSE: STT) holds the dollars pegged to the Gemini Dollar in trust accounts , Market Watch reports. Moreover, Mr. Market gives the Gemini Dollar some real value.
Impressively, Coinmarketcap gives the Gemini Dollar a Market Capitalization of $72.123 million and a Coin Price of $1.01 on 8 March 2019. In addition, the Gemini Dollar had a 24-Hour Market Volume of $3.21 million on March 11, 2019. Moreover, there was a circulating supply of 71.214 million GUSD on the same day.
Hence, the Gemini Dollar (GUSD) looks like a good cryptocurrency. However, I cannot see how it differs from established stablecoins like Tether (USDT) and USD COIN (USD).
GMO Japanese YEN (GJY)
The GMO Japanese YEN (GJY) will be a Yen-pegged stablecoin, the GMO Internet Group plans to launch in 2019.
Notably, GMO will use the GJY token to enter the cryptocurrency payment service business, a press release states. The GMO Inter Group plans to launch GJY in various Asian countries.
GMO operates a cryptocurrency exchange and a cryptocurrency operation in Japan. The current plans call for GMO’s Z.com subsidiary to launcy the GMO Japanese YEN (GJY) in 2019. However, I could find no evidence the GMO Japanese YEN is actively trading.
A Hangzhou-based company called Grandshores Technology Group has plans for at least two stablecoins. The South China Morning Post reports, the Hangzhou Grandshores Fund is trying to raise $12.7 million to fund yen and US dollar pegged stablecoins.
Details of this project are scarce but Li Xiaobli; the so-called “Bitcoin tycoon” of China, is reportedly backing it. Grandshores is an effort to watch because it could be the first Chinese-based stablecoin.
Oddly, Grandshores seems to have no plans for a yuan-backed stablecoin. Significantly, the Hangzhou Grandshores Fund is backed by Hangzhou’s government. Thus, the Grandshores venture has official support.
Stronghold USD (USDS)
The Stronghold USD (USDS) US Dollar-pegged stablecoin has a high-level backer in the form of IBM (NYSE: IBM).
In detail, Stronghold USD is yet another Ethereum request for Comment (ERC20) stablecoin. Hence, Stronghold you can theoretically USDS into other Ethereum tokens.
However, Coin Frenzy claims IBM is testing the use of Stronghold USD in its blockchain experiments. Stronghold is a blockchain platform that allows for the tokenization of assets.
In addition, Stronghold claims it can provide an instant settlement of cross-border payments in US Dollars via a “lightning-fast network.” Hence, Stronghold could have a lot of value if these claims are true.
In fact, cross-border payments will be a $22.23 trillion-dollar business in 2019, Statista forecasts. Plus, the value of cross-border payments could grow to $26.64 trillion-dollars by 2023. Moreover, Statista calculates retail cross-border payments are a $2.58 trillion-dollar market that will grow to $3.56 trillion dollars by 2023.
Stronghold USD (UDS) demonstrates Stablecoins are unstable
Given these numbers, Stronghold USD could become a popular stablecoin if IBM and Stronghold and IBM build such a network. However, the available data shows Mr. Market doubts Stronghold’s claims.
In particular, Stronghold USD (USDS) had a Coin Price of $1.01 and a Market Capitalization of $404,985 on 11 March 2019. Strangely, Stronghold’s 24-Hour Market Volume of $885,814 exceeded the Market Cap on March 11, 2019.
Thus, demonstrating that stablecoins are not stable. Stronghold’s market volume shows a danger with stablecoins, they can lose value fast. Stablecoins lose value quickly because it is easier for owners to cash them out.
USD Coin (USDC)
The USD Coin (USDC) is yet another ERC20 cryptocurrency with some major backers. Essentially, an USDC Coin token is an Ethereum smart contract programmed to pay you $1 when spend USDC.
In particular, the popular American digital wallet, Coinbase is backing USD Coin. In addition, USD Coin is the creation of CENTRE, a joint venture of the popular crypto asset exchange operator Circle and Coinbase.
Significantly, CENTRE owns the popular crypto-asset exchange Poloniex. Moreover,the American investment-banking giant Goldman Sachs (NYSE: GS) backs Circle. Hence, USDC Coin could have the support of Goldman Sachs.
Coinbase calculates USD Coin had a 24-Hour Market Volume of $25.8 million, a and a Circulating Supply of 236.6 million USDC on 11 March 2019. However, Coinmarket cap estimates USD Coin (USDC) had a 24-Hour Market Volume of $25.828 million, and a Market Capitalization of $239.7 million on the same day.
Coinbase estimates USD Coin had a Circulating Supply of 236.602 million USDC, a Coin Price of $1.01, and a Total Supply of 236.888 million USDC on 9 March 2019. Consequently, I think these numbers make USDC Coin one of the safest and most valuable stablecoins around.
India’s Central Bank Explores Central Bank Stablecoins
Significantly, India’s central bank; the Reserve Bank of India, is researching a Rupee-pegged stablecoin.
“In India, an inter-departmental group has been constituted by the Reserve Bank to study and provide guidance on the desirability and feasibility to introduce a central bank digital currency,” The Reserve Bank’s Annual report states.
To clarify, an intergovernmental group at the Reserve Bank is running a feasibility study on a rupee-backed digital currency, The Economic Times reports. In particular, the Reserve Bank wants to reduce costs by eliminating paper money and coins.
Interestingly, some Reserve Bank officials think a national stablecoin will discourage the use of unstable private cryptocurrencies. Not surprisingly, both the Reserve Bank and China’s PBOC are discouraging private cryptocurrencies and private stablecoins, while research official stablecoins.
Why Central Banks like Stablecoins
One advantage to a national stablecoin is that the central bankers will control the printing press. To explain, the central bank could reduce the possibility of inflation by limiting the stablecoin supply.
In addition, a central bank could stimulate the economy by mining more stablecoins. Moreover, the central bank could spread the stimulus to everybody by sending stablecoins to all citizens. For example, the Reserve Bank could deposit crypto-rupees in every Indian’s digital wallet during a recession.
Hence, stablecoins could make Milton Friedman’s old dream of helicopter money a reality. In detail, helicopter money is a direct economic stimulus in which a central bank distributes cash to citizens. However, helicopter stimulus is not practical with paper money.
Therefore, stablecoins could give central bankers more control over the economy. Notably, a central bank could ignore the national legislature and hold a helicopter money stimulus any time it wanted. Obviously, Libertarians, populists, cultural conservatives, and socialists will not like that development.
How Stablecoins could Wreak Economic Havoc
Under these circumstances, speculators need to watch all stablecoin research at central banks carefully. In fact, I believe a stablecoin issued by a major central bank like the PBOC will be a gamechanger.
For instance, such a stablecoin could become the most valuable and popular cryptocurrency on Earth overnight and completely disrupt the market. In addition, a crypto-pound, a crypto rupee, or a crypto-Swiss franc, could make those currencies more popular than the US Dollar or the Euro.
Thus, everybody needs to pay attention to stablecoins because these humble tokens could wreak a lot of economic havoc. Fortunately, those who pay attention to stablecoins could make a lot of money from the havoc they wreak.