Fiat Or Secured Bonds — Searching For The Most Reliable Collateral

We have already mentioned how EURxb is different from other stablecoins, but today we would like to talk about stable coin backing — which is safer, fiat collateral or secured bonds?

What do you really need in collateral when picking a stable coin? Sure, cash in an account sounds good — but with negative interest rates coming around the world this may soon become a problem for stablecoins using that as collateral! Also, it is really hard to truly verify fiat cash in a bank account. And another important point: fiat money can be used as a surety for a loan that stablecoin holders cant even see — meaning the money may be there but it might not really be available to you when you need it.

Now, when a stablecoin is backed by secured bonds, it’s a completely different story. All such reserves are verifiable and go with all the necessary legal papers. Secured bonds pledged for issuing stablecoins are used EXCLUSIVELY for stablecoins, and this allows stablecoin holders to profit. This is similar to bank deposits, where banks put the money you deposit to use, splitting the profits from secured bonds between themselves and you.

So why should you share your profits if you can have it all with the EURxb token?