Let’s face it – there is not much stability and security when it comes to cryptocurrencies, especially lately, after the volatile movements and the unstable prices on the coin market cap. However, the notion of a stable coin has already been embraced by the community – leading to “stablecoins” as the digital tokens that are intended to provide measurable stability and security.
The coins are “designed to be used as a unit of account and store of value”. Digitally, they would have a lot of broad and substantial implications in the fintech world.
However, according to Cryptolinks (and many other sources):
“Stablecoins are what allows us to realize the promise of blockchain technology. Any application which requires a low threshold of volatility to be viable on a blockchain, consumer loans for example, simply cannot be denominated in a currency which fluctuates 10–20 percent in a day, like Bitcoin and Ether. If you’re using Bitcoin to send a remittance from one country to another, there’s a good chance that the price movement over the period of one block confirmation (how long it takes the blockchain to include your transaction) will be larger than the fees charged by Western Union or PayPal.”
The main problem that remains is that no team on Earth has been able to develop a stablecoin that won’t compromise features of security or decentralization so far. However, there are a few companies making headways in the space right now. One of them is the TrueCoin Project that is building a USD-backed stablecoin that will be 100% collaterized, legally protected and transparently audited.
According to experts, TrueCoin will offer an alternative to Tether (a USD-based stablecoin that grew to $1.5 billion but is distrusted by crypto exchanges and traders) and offer improved monthly auditing, 100% collateral in USD and enforceable legal rights for every token holder – in a real set of bank accounts.
At this point, it is interesting to see how the development of stablecoins will go and how the different teams will take up on different technical and operational challenges.
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