Over 50 stablecoin-related projects are currently in development. This type of cryptocurrency is quickly becoming the “hottest” topic in the industry, and a number of noteworthy stablecoin projects have launched in recent weeks. Even though Tether dominates the market, according to recent reports potential competitors have started to emerge over the past 12–18 months. Here we cover the most recent ones.
Gemini Dollar (GUSD)
Gemini, the crypto exchange founded by the Winklevoss brothers, launched its own Ethereum-based stablecoin at the beginning of September. The Gemini Dollar is pegged to the US dollar, with each token backed by a US dollar in a reserve of cash managed by the Wall Street custody bank State Street. The goal is to promote the coin to serve as a new type of digital cash useable it in stores.
The Gemini Dollar is also called “the world’s first regulated stable coin” since it’s the subject of oversight from financial regulators such as the New York Department of Financial Services (NYDFS). The crypto is also subject to New York Banking Law; moreover, it has already been assessed by the information security company Trail of Bits. GUSD is listed for trading on a number of exchanges like HitBTC, Bibox, DigiFinex and others.
According to the Gemini official website, Gemini Dollars work as follows. To obtain Gemini dollars a user should initiate a withdrawal of coins from a dedicated Gemini account to an Ethereum address. The system creates Gemini dollars, debits the U.S. dollar amount from a dedicated Gemini account and sends them to the Ethereum address specified. To get U.S. dollars a user should deposit Gemini dollars into his/her Gemini account. The system redeems coins and credits the U.S. dollar amount to a given account.
Paxos (PAX)
Blockchain startup Paxos announced the launch of its stablecoin at the beginning of September. Paxos Standard is fully backed by the U.S. dollar; the new coin is legally regulated and approved by the U.S. Securities and Exchange Commission to hold client funds. It has also been approved and will be regulated by the NYDFS. The stablecoin is built based on the ERC-20 standard.
Paxos CEO and co-founder Charles Cascarilla stated that PAX’s goal is to enable financial markets to conduct transactions by way of a “fully USD-collateralized asset” that leverages blockchain technology. It is also aimed at investors trading in crypto assets by providing liquidity and much needed trust.
This stablecoin can be transferred between any two wallets on the Ethereum network. Tokens are destroyed when they are redeemed, to sustain the currency’s value. Tokens still in circulation will be backed by dollars held in the company’s custody. Only verified Paxos customers will be able to purchase or redeem tokens on the company’s website. PAX is already listed on Binance.
USD Coin (USDC)
Cryptocurrency company Circle, which is backed by Goldman Sachs, issued a new stablecoin at the end of September. USDC is pegged to the dollar and is open source; it was developed by Centre.io. Circle also acquired Poloniex, a top 30 crypto exchange, earlier this year.
According to a company statement, 30 partners have agreed to support USDC including OKCoin and CoinEx crypto exchanges as well as the Coinbase wallet. The developer of the stablecoin, Centre.io, requires USDC issuers to meet compliance standards. The company is collaborating with four banking partners who will hold the dollar reserves customer deposits. Reserves will be audited on a monthly basis. One partner is the U.S.-based Bancorp Asset Management company.
LBXPeg
London Block Exchange (LBX) announced the launch of LBXPeg, the first GBP-collateralized stablecoin, at the very end of September. The coin is fully backed by GBP reserves held in an auditable UK bank. It is currently implemented as an ERC-621 token, but will be issued on other blockchains that support compliance controls.
According to LBX’s CEO Benjamin Dives, the main use cases for LBXPeg are as follows: “..Settlements for OTC trades on the London stock market, commonwealth exchanges where they don’t have fiat banking, and also security token issuers who want to pay dividends in crypto pounds”. The company’s press release states that GBP reserves will undergo regular audit and the first cryptopound will be “minted in the next 10 days”.
Tiberius Coin
Tiberius Group, a Switzerland-based commodities fund, has announced the launch of its own cryptocurrency which will be backed by precious metals such as gold and platinum but also tin, copper, nickel, aluminum and cobalt. The coin will be sold at around $0.70 USD under Swiss law; there will be no ICO.
Company representatives told Bloomberg that supply of the new coin will depend on demand; it will be limited by the availability of metals included in the portfolio of commodities used to back the currency. Tiberius Coin is backed by a mix of different types of metals — a notable difference from other stablecoins which are backed by only one commodity.
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