Guest post by George Harrap from Bitspark
George is the CEO of Bitspark.
Following the aftermath of 2018’s price drop—which saw the value of Bitcoin below 80 percent of the value from its all-time high—stablecoins are looking to become a more attractive crypto solution this year, particularly in the Asia-Pacific Region.
As we begin the new year, it’s important for us to take stock of the stablecoin landscape, and be aware of what the industry should work on to benefit the user.
Unlike Bitcoin or other cryptocurrencies, stablecoins are more immune to price fluctuations because they are pegged to tangible and more stable assets, like the US dollar (USD).
With the current market sentiment turning more towards less price-volatile options, it is unsurprising that interest in the space is on the rise. Most recently, big tech companies like Facebook have even been rumored to have stablecoin solutions in the works.
Read: Binance CFO Interview: 2 Main Things Will Drive Mainstream Crypto Adoption
Setting the Stage for the Future of Stablecoins
In the past year, the sector has made headway in developing several options for USD-pegged coins, such as the USD Coin (USDC) created by Circle and Coinbase, the Gemini Dollar (GUSD) and TrueUSD (TUSD).
We can expect this to develop further in the year ahead, especially with algorithmic stablecoins. These types of stablecoins are essentially smart contracts where people put up collateral in a cryptocurrency (like Ethereum) to back the value of a stablecoin pegged to a fiat currency. With this method, there is no need for KYC measures to be put in place because there is no need for a counterparty to maintain reserves or redeem money from.