SAGA will launch a new stablecoin that will be pegged to the Special Drawing Right monetary reserve. After the announcement by Libra earlier this year, there were a lot of mixed reactions on the market but also a lot of attraction for the field causing other platforms to think in this direction.
In today’s altcoin news, we read about SAGA’s new Monetary Technologies’ token dubbed the SGA which will be launched on December 10. SAGA will launch the new stabelcoin this winter and till starting trading immediately afterward. The entire onboarding process is available from now. The new stabelcoin will be an ERC-20 token which will tackle critical pressure points such as governance and regulatory compliance. As per the announcement, SGA ‘’is designed to serve as a frictionless global currency.’’
Most of the stablecoins are usually backed by a single currency or an entity so SGA seems to be doing things a little bit differently. The value of the new stabelcoin will be backed by the Special Drawing Right or SDR which is an artificial currency instrument that is created by the International Monetary Fund to operate as a supplement for the existing money reserves. This type of backing combined with the SAGA contracts will help the token to regulate itself.
Once it is launched, one SGA will be worth one tokenized SDR but this could also change in the future depending on how the market reacts. For example, if the price of SGA goes up, then it will hold its own value and it will rely less on SDR. If the price goes in the opposite direction, both of the values will resemble each other. This dependence should exclude SGA from becoming a target of pump and dump schemes.
Facebook’s idea to create a stablecoin brought serious attention and controversy and most of the regulators didn’t agree with the proposed solution by the social media giant. China reacted among the first to the announcement and stated they will be launching their own government-backed currency. The coin should have been distributed to institutions and corporations from this month but this hasn’t happened yet. Later, the People’s Bank of China stated they will be the first to launch such a product.
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