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OKCoin to Issue Chinese Yuan-Backed Crypto – Are There Too Many Stablecoins?

In spite of depressed costs and a scarcity of liquidity and quantity within the crypto marketplace, stablecoins, cryptocurrencies tied to the price of a non-unstable asset, have turn into the flavour of the month.

OKCoin Founder Star Xu Announces Chinese Yuan-Backed Crypto

OKGroup founder Star Xu, who was once reportedly the topic of a Shanghai Municipal Police investigation, not too long ago broke his radio silence on Twitter to divulge his plan to release a Chinese Yuan-backed stablecoin.

Much to the chagrin of decentralists, who declare that stablecoins handiest help centralized establishments, crypto savant Xu defined that this type of cryptocurrency is digital money “in essence.” Elaborating in this fairly inflammatory remark, the business chief claimed that the one distinction between executive-issued currencies and stablecoins is the medium that they’re transacted via.

As the digitalization of the sector continues, Xu expects for the established order of a CNY-subsidized crypto asset to be a part of an “inevitable trend,” as innovators imagine that the tokenization of currencies international will handiest bolster the worldwide economic system. He wrote:

“Today, the amount of cash in China’s domestic monetary system is not small. A dollar-pegged stablecoin regulated by the US government will strengthen the penetration of the US dollar 100 fold. Embracing this tide of technology, the launch of a CNY backed stablecoin is an inevitable trend, and it will significantly improve the internationalization of the RMB.”

Capitalizing in this obvious “trend,” the OKCoin founder defined that his trade’s USA department will release a “fully compliant stablecoin” within the close to long run, however didn’t give any longer main points in regards to the topic.

Taking his previous feedback into context, it may be assumed that OKCoin USA is these days exploring choices to code, again, and factor a virtual asset that can legitimately constitute the Chinese Yuan.

Too Many Stablecoins?

Xu isn’t the one one hopping at the stablecoin bandwagon, so to talk, as a numerous choice of crypto-centered firms, from exchange giant Gemini to lesser-recognized startups, have expressed hobby on this subsector. MakerDAO, which is house to the decentralized DAI stablecoin, even attracted a hefty funding from Andreessen Horowitz’s in-area crypto fund, which reportedly bought $15 million value of MKR tokens.

However, many have expressed their skepticism and disinterest in those tasks, as it’s transparent that the stablecoin marketplace is overly saturated. Even prior to Xu introduced OKCoin’s plans to input the stablecoin fray, Travis Kling, who simply introduced the Ikigai crypto fund, took to Twitter to talk about marketplace over-saturation and over-capitalization. While his remark was once aimed on the crypto and blockchain business as an entire, Kling particularly referred to as out stablecoins, alluding to the truth that those new tasks aren’t important, particularly amid a undergo marketplace.

At CambridgeHouse’s Extraordinary Future 2018 convention, Alex Tapscott, the writer of the sector-famend Blockchain Revolution, gave additional credence to the anti-stablecoin sentiment, declaring:

“I’m kind of skeptical on stablecoins because what they do is create intermediary and counterparty risk. So you have this coin that you can spend super easily, but in the end, it needs to be redeemable for some asset. So whoever holds that asset, holds the risk.”

So whilst it will be unfair to instantly cut price OKCoin’s stablecoin challenge or another fiat-subsidized mission for that topic, it’s obvious that there are a couple of too many chefs within the stablecoin kitchen.

Featured Image from Shutterstock

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