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Could stablecoins be the next big thing?
Cryptocurrency is highly volatile, limiting its use as a medium for commercial transactions and discouraging mainstream participation. Stablecoin is a cryptocurrency having low volatility. Due to the ongoing war situation, the Covid-19 pandemic, monetary instability, and inflation, the global economies have reached a critical point, and the digital transaction has become a critical requirement.
Crypto enthusiasts want cryptocurrencies to become mainstream, with all brands, businesses, and stores accepting bitcoin in return for goods and services. But there's a catch: how can someone trade something for a coin with such high volatility? It may appear to be a foolish concept to an average business person. It's difficult to accept a currency that can suddenly fall or pike. On top of it are the tax and transaction fees. Now that's where the stablecoins come to the rescue, a digital currency that can successfully store value and be used as a medium of trade over time.
What are stablecoins?
Stablecoins are a type of cryptocurrency that is less volatile than others. In comparison to other cryptocurrencies, they are typically pegged to the underlying assets to reduce price fluctuations and are more regulated. Different stablecoins use different collateralized assets and strategies to attain price stability.
Stablecoins are backed by commodities, cryptocurrencies, fiat money, or a combination of these. Binance, Tether USD, USDT, Diem, and USD are examples of stablecoins backed by fiat money whereas cryptocurrencies back DAI. DGX is a stablecoin backed by commodities.
Stablecoins offers the best of both worlds.
It combines the security, anonymity, and decentralization of a cryptocurrency with the stability and low volatility of a fiat currency.
Stablecoins have sufficient liquidity even in the case of an increase in prices. Unlike cryptocurrencies, which most people cannot afford due to their exorbitant costs, stablecoins stablecoins provide an alternative that is accessible to everyone, just like an actual currency. You can use your smartphone to transact these coins even without a traditional bank account.
Another reason to applaud stablecoins is that they can make cross-border transactions faster and cheaper by eliminating the need for numerous banking institutions. These coins can also be used as governance tokens, allowing its owners to participate in and contribute to future changes in the regulation of the stablecoin, ensuring that communal decisions are made.
The rising popularity of stablecoins will serve as a major driver for the widespread adoption of cryptocurrencies as a mainstream medium of everyday transactions as well as for other purposes.
Now let's see what's the big news:
Fireblocks and ANZ Partner to Create First AUD-Pegged Stablecoin A$DC
The first AUD-pegged stablecoin was created by Fireblocks, a worldwide digital asset custodian, collaborating with Australia and New Zealand Banking Group (ANZ). According to reports, ANZ bank has already issued $30 million in A$DC after the Victor Smorgon Group, a significant family office based in Australia, handed the money to Zerocap.
"An ANZ-issued Australian dollar stablecoin is a first step in enabling our customers to find a safe and secure gateway to the digital economy," said ANZ Banking Services Portfolio Lead Nigel Dobson in a press release.
This is the first time a large bank has been engaged in the development of a stablecoin, according to the bank. The Australian Transaction Reports and Analysis Centre (AUSTRAC) and the Australian Prudential Regulation Authority (APRA) are working with ANZ to have the project signed off in a compliant way.
This is a huge step forward in Australia's cryptocurrency adoption. Furthermore, institutional investors are more likely to access the crypto market through regulated means.
The rival, National Australia Bank (NAB), on the other hand, has its own stablecoin project that is set to launch before the end of the year.
The studio behind Pubg is going to make Solana NFT games.
Traditional video game companies are starting to look at the Web3 gaming arena, experimenting with NFT assets and cryptocurrency-based economies. Another well-known game studio with a hugely popular series is now planning to create blockchain-based games on Solana.
Krafton, Inc., a South Korean game publisher, announced a long-term partnership with Solana Labs, with ambitions to collaborate on developing blockchain and NFT-based games that operate on the Solana network. The firms also intend to look into co-investment opportunities.
Krafton is the studio behind PUBG: Battlegrounds. The series' mobile iOS and Android editions have surpassed one billion downloads, with more than 75 million downloads for the PC and console entries combined. To date, in-game purchases have brought in more than $7 billion in income for the game.
The company hasn't said if it'll move PUBG or another title to Web3 or create new IP for Solana's NFT-driven blockchain games. While PUBG is the publisher's most well-known IP, it also owns and produces franchises, including Subnautica and Tera and mobile titles like Golf King and Bowling King. It has also announced a partnership with Naver Z to develop an "NFT and metaverse platform." Last August, the company went public in South Korea with a $3.8 billion IPO.
Ubisoft and Square Enix are two more major traditional game publishers that have recently entered the NFT space, while well-known game designers like Will Wright and Peter Molyneux are also working on NFT-powered games.
BlackRock's Fink Says Ukraine War Could Accelerate Crypto Adoption
According to BlackRock CEO Larry Fink, the Russia-Ukraine conflict could boost the use of digital currencies as a vehicle for international trade.
According to a Reuters article on Thursday, the battle will force countries to reconsider their currency reliance.
"A global digital payment system, thoughtfully designed, can enhance the settlement of international transactions while reducing the risk of money laundering and corruption", the CEO of the world's largest asset manager wrote.
In response to rising client interest, he said that BlackRock is studying digital currencies and stablecoins. Since February, the asset manager has been considering offering crypto trading services to its clients.
BlackRock had suspended the purchase of any Russian securities in its active index portfolios following Moscow's invasion of Ukraine.
Before Moscow invaded Ukraine, which resulted in Western sanctions and the shutdown of the Russian stock market, BlackRock Inc's overall client exposure to Russia had dropped to less than $1 billion from $18 billion earlier this month.