This week the largest stablecoin by market capitalization, Tether (USDT), was yet again under immense scrutiny from the cryptocurrency industry. Rumors started surfacing that digital asset exchange Binance would delist the stablecoin. Besides these rumors, Tether withdraws were halting, causing even more drama. During the last months Tether has gained a lot more opponents because of its lack in transparency and its inability to provide insights into its financials. Various cryptocurrency traders are looking at new stablecoins that will provide a safe haven for hedging against Bitcoin and altcoins or trading in and out of Bitcoin.
What exactly is a stablecoin?
A stablecoin is a cryptocurrency that is pegged to a stable asset, such as: gold or fiat currencies. Either a centralized authority or a decentralized autonomous organization (DAO) are issuing the tokens.
Listing announcement
Digital asset exchange Huobi Global announced today that it will be increasing its stablecoin collection by adding 4 stablecoins to the exchange. They are doing this to offer its users more choices in picking a stablecoin they feel comfortable to use when trading as a temporary hedge against Bitcoin or altcoins. The newest additions to Huobi Global will be launched on the 19th of October.
Here’s a summary of the 4 stablecoin projects that will be listed on Huobi Global.
The Gemini Dollar (GUSD)
The Gemini Dollar is created by the founders of U.S. based digital asset exchange Gemini. Tyler and Cameron Winklevoss are well-known Bitcoin billionaires that aim to disrupt the cryptocurrency industry. The ERC20 based token GUSD is regulated by the New York State Department of Financial Services. The equivalent amount of circulating GUSD tokens will be deposited into the official Gemini Dollar bank account at the State Street Bank and Trust Company. A monthly audit will take place to guarantee its 1:1 peg.
To learn more about the Gemini Dollar visit their official website: https://gemini.com/dollar/
Paxos Standard Token (PAX)
Another token that is approved and regulated by the New York State Department of Financial Services is Paxos. The new digital dollar, PAX, is also collateralized 1:1 with the U.S. dollar. Just like the circulating amount of its stablecoin, PAX also has a corresponding bank account that hold the equivalent of circulating PAX tokens in their balance in dollars. Paxos has hired leading auditing firm Withum to execute monthly audits to provide transparency to the Paxos project.
To learn more about Paxos Standard Token visit their official website: https://www.paxos.com/
TrueUSD (TUSD)
Trust Token’s TrueUSD is a stablecoin that is backed by the U.S. dollar. It was the first stablecoin that was officially regulated by the U.S. Government. Some high-profile professional investors like A16Zcrypto, ZhenFund and Stanford Startx Fund backed the project. Cohen & Co is the appointed auditing firm responsible for providing TrueUSD transparency reports.
To learn more about TrueUSD visit their official website: https://www.trusttoken.com/
USD//Coin (USDC)
Behind the USDCoin project is a large technology start-up called Circle. Circle made headlines a few months ago when they acquired digital asset exchange Poloniex for 400 million U.S. dollars. Besides Poloniex they are also the owners of Circle Pay (payment provider for the remittance market) and Circle Trade (OTC crypto trading platform). Just recently they added stablecoin USDCoin to their portfolio. USDCoin is powered by centre.io’s open-source framework.
To learn more about USD//Coin, visit their official website: https://www.centre.io/
Concluding remarks
I believe it was a very smart decision to add 4 stablecoins to the exchange. If Tether does break down and gets destroyed at least exchange users will have other options besides going back into Bitcoin or altcoins. I also feel confident in the specific tokens they added and it is positive that three of them have been officially regulated by the U.S. government.
On the downside, the fundamentals of stablecoins assume that they are stable. With Tether’s price trading at $ 0.85 a piece earlier this week, TUSD reaching $ 1.06 and GUSD trading at $ 1.16 at the moment one may argue that this is not exactly stable, compared to the 1 TUSD equals 1 USD or 1 GUSD equals 1 USD ratio it should be. The past has shown us that some stablecoins (e.g. Nubits and Steem Dollars) have failed to provide an ongoing stability in regarding their price.
We (Huobi Global) invite institutional traders, acceptance dealers, and OTC market to contact Huobi directly for cooperation, by sending an email with the subject “Stablecoin Cooperation” to institution@huobi.com.
If you do not have a trading account on Huobi Global yet, you can sign up using this link.
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Disclaimer: This article is not intended as investment advice. It is just my personal opinion about Huobi and the four mentioned stablecoins. You should always do your own research #DYOR. Huobi Global incentivizes me for writing this article and encourages me to express my own opinions.
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