Difference between revisions of "Stablecoin"

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The concept of stablecoin was tarnished somewhat in October 2018 when suspicions about Tether's integrity led to a fall in price. Tether's price decline to $.87 from its $1 "peg" on October 16, 2018 was approximately contemporaneous with a sharp increase in the value of the Gemini Dollar to $1.19 from its $1 "peg."<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-10-15/dollar-peg-that-underpins-20-of-crypto-trades-is-under-pressure|name=Crypto Markets Roiled as Traders Question Tether's Dollar Peg|org=Bloomberg|date=October 15, 2018}}</ref><ref>{{cite web|url=https://www.coindesk.com/winklevoss-backed-stablecoin-soars-above-1-as-tethers-market-cap-plunges/|name=Winklevoss-Backed Stablecoin Soars Above $1 as Tether's Market Cap Plunges|org=Coindesk|date=October 17, 2018}}</ref>
 
The concept of stablecoin was tarnished somewhat in October 2018 when suspicions about Tether's integrity led to a fall in price. Tether's price decline to $.87 from its $1 "peg" on October 16, 2018 was approximately contemporaneous with a sharp increase in the value of the Gemini Dollar to $1.19 from its $1 "peg."<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-10-15/dollar-peg-that-underpins-20-of-crypto-trades-is-under-pressure|name=Crypto Markets Roiled as Traders Question Tether's Dollar Peg|org=Bloomberg|date=October 15, 2018}}</ref><ref>{{cite web|url=https://www.coindesk.com/winklevoss-backed-stablecoin-soars-above-1-as-tethers-market-cap-plunges/|name=Winklevoss-Backed Stablecoin Soars Above $1 as Tether's Market Cap Plunges|org=Coindesk|date=October 17, 2018}}</ref>
  
In a statement published on its website on December 13, 2018, the issuer of Basis, Intangible Labs, announced that it was returning investor monies and shutting down Basis stating, "Unfortunately, having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis."<ref>{{cite web|url=https://www.basis.io/|name=Letter to Basis Community|org=Intangible Labs|date=December 14, 2018}}</ref>  
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In a statement published on its website on December 13, 2018, the issuer of Basis, Intangible Labs, announced that it was returning investor monies and shutting down Basis stating, "Unfortunately, having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis."<ref>{{cite web|url=https://www.basis.io/|name=Letter to Basis Community|org=Intangible Labs|date=December 14, 2018}}</ref>
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In October 2019, Representative Sylvia Garcia, a Texas Democrat introduced a proposed bill to regulate managed stablecoins called the “Stablecoins Are Securities Act of 2019.” <ref>{{cite web|url=https://www.coindesk.com/us-lawmaker-introduces-bill-classifying-stablecoins-as-securities|name=US Lawmaker Introduces Bill Classifying Stablecoins as Securities|org=CoinDesk|Date=October 28, 2019}}</ref> Observers at the time noted that it was likely targeted at [[Facebook]]'s [[Libra]], rather than at stablecoins like [[Tether]].<ref>{{cite web|url=https://www.forbes.com/sites/jasonbrett/2019/10/26/stablecoins-are-the-new-bitcoin-in-congress/#13ce711d5bc4|name=‘Stablecoins Are The New Bitcoin’ In Congress|org=Forbes|date=October 28, 2019}}</ref> At about the same time, Facebook's David Marcus told a banking seminar that it was considering using single currency stablecoins instead of creating a unique Libra coin.<ref>{{cite web|url=https://www.reuters.com/article/us-imf-worldbank-facebook/facebook-open-to-currency-pegged-stablecoins-for-libra-project-idUSKBN1WZ0NX|name=Facebook open to currency-pegged stablecoins for Libra project|org=Reuters|date=Octob er 28, 2019}}</ref> 
 
   
 
   
 
== References ==
 
== References ==

Latest revision as of 11:32, 28 October 2019


A "stablecoin" is a cryptocurrency that is pegged to, or interchangeable with the value of an asset like gold or fiat currency. For example, Tether, Basis, Gemini Dollar, Paxos Standard and Petro are all stablecoins.[1][2]

The concept of stablecoin was tarnished somewhat in October 2018 when suspicions about Tether's integrity led to a fall in price. Tether's price decline to $.87 from its $1 "peg" on October 16, 2018 was approximately contemporaneous with a sharp increase in the value of the Gemini Dollar to $1.19 from its $1 "peg."[3][4]

In a statement published on its website on December 13, 2018, the issuer of Basis, Intangible Labs, announced that it was returning investor monies and shutting down Basis stating, "Unfortunately, having to apply US securities regulation to the system had a serious negative impact on our ability to launch Basis."[5]

In October 2019, Representative Sylvia Garcia, a Texas Democrat introduced a proposed bill to regulate managed stablecoins called the “Stablecoins Are Securities Act of 2019.” [6] Observers at the time noted that it was likely targeted at Facebook's Libra, rather than at stablecoins like Tether.[7] At about the same time, Facebook's David Marcus told a banking seminar that it was considering using single currency stablecoins instead of creating a unique Libra coin.[8]

References