Bringing Forex Digital — Why non-USD stablecoins matter
According to BIS Triennial Survey in 2019, there was approximately $2.4 quadrillion in market size with roughly $6.6 trillion in daily trade volume. The Forex market is by far the largest market in the financial industry. How is this compared to the crypto market size?
In this post, we are going to lay out the facts and explain why we think bringing the forex market digital is a huge deal.
What are major currencies?
The most traded currency pairs in the world are called the “majors”. Major currencies include US dollar, Euro, Japanese yen, Canadian dollar, Australian dollar, Pound sterling, Chinese yuan, and Swiss franc.
As the world’s reserve currency, the US dollar is obviously the number one pick for FX traders as USD is on one side of 88% of all 170 currencies.
Here’s the breakdown of market dominance by major currency pairs, which accounts for 64.2% of the forex market’s entire daily volume:
Bringing forex DIGITAL
The stablecoin market is dominated by USD stablecoins, however, we are seeing more and more stablecoins that are pegged to different currencies. Let’s look at what fiat-backed stablecoins we have in the crypto market now.
Though the market size for non-USD stablecoins is much smaller than USD-pegged stablecoins, we see the demand for non-USD stablecoins is rising as there are more and more applications for stablecoins in the space. Among the applications and needs from the users, the demands from FX traders catch our attention.
Benefits of Trading Digital FX
Traditional FX traders might encounter the inconvenience of long settlement time and limited trading hours during weekends. However, with stablecoins backed by different currencies, traders could speed up their settlement by trading currency pairs via stablecoins and enjoy the 24/7 non-stop trading venue. Traders would be able to move among different stablecoins much faster than traditional FX trade. In addition, the market of cryptocurrency will never stop, traders could always trade at the time they want.
Since JPY fiat is often seen as a safe haven currency, we believe that JPY-backed stablecoin may provide a solution for those who are suffering from either volatility in other cryptocurrencies or fiat.
The first regulated Japanese Yen Stablecoin, GYEN
GYEN is a 100% fiat-backed ERC-20 stablecoin developed and issued by GMO Trust. Every token will have a one-to-one reserve balance and can always be redeemed 1:1 with JPY fiat directly from GMO Trust.
In addition, we have launched ZUSD/GYEN and USD/GYEN pairs on our partner exchanges, such as Liquid and INX. Start trading digital FX with GYEN and ZUSD now!
Learn more about GYEN and ZUSD at our website!
Reference
https://www.bis.org/publ/qtrpdf/r_qt1912.pdf
https://www.bis.org/statistics/rpfx19_fx.pdf
DisclaimerThis content is not financial advice and it is not a recommendation to buy or sell any financial instruments, FX trading, cryptocurrency or engage in any trading or other activities. You must not rely on this content for any financial decisions. Acquiring, trading, and otherwise transacting with financial instruments or cryptocurrency involves significant risks.We strongly advise our readers to conduct their own independent research before engaging in any such activities.GMO Trust does not guarantee or imply that any cryptocurrency or activity described in this content is available or legal in any specific reader’s location. It is the reader’s responsibility to know the applicable laws in their country.
