We reported on Tether (USDT) yesterday and how the stablecoin that should have been pegged to USD has lost a good chunk of its value before bouncing back on positive news. Issues like these have seemingly shaken up exchanges, which are now looking for other alternatives to secure ‘fiat’ liquidity and pairs. Some of these may seem as better alternatives to USDT, which has a market cap of over 2 billion USD currently.
One of the few major Cryptocurrency exchanges has already gone forward and announced support for all 4 alternatives as Huobi adds Paxos, TrueUSD, USD Coin and Gemini Dollar. With this decision Huobi is increasing the stablecoin selection found on the exchange and will further strengthen the position of these fiat pegged digital currencies.
Stablecoins
• Paxos Standard Token (PAX) – The company behind PAX, Paxos is a Trust company that is regulated by the New York State Department of Financial Services. The stablecoin/token that is based on Ethereum is fully collateralized by USD. Conversion to PAX and transaction fees are free, redeeming from the Ethereum smart contract as easy as it gets. The collateral behind PAX is handled by FDIC-insured U.S. banks.
Marketcap: 54.4 million USD
Website: https://www.paxos.com/
• TrueUSD (TUSD) – TrueUSD is an exchange independent and regulated stablecoin built on the Ethereum network that is pegged to USD on a 1:1 basis. TrueUSD was launched as a part of the TrustToken product line and can be redeemed through the TrustToken website. TrustToken is an asset tokenization platform, which will utilize unique trust contracts to launch new assets. The venture is backed by several heavyweight Digital Asset funds including the a16zcrypto, Blocktower, Foundation Capital, ZhenFund and more.
Marketcap: 160 million USD
Wesbite: https://www.trusttoken.com/
• USD Coin – USD Coin has been developed by a collaboration of the Goldman Sachs backed Circle ventures and Centre. This USD pegged stablecoin is built on Ethereum as well and is being governed and developed by several respected players in the crypto field including Circle, BitGo, Bitpay, BlockFi and more. This token is the newest player from the lot as it was announced at the end of September this year. The framework behind USDC is seemingly open, anyone can issue USDC as long as the audit standards meet Centre’s guidelines.
Marketcap: 24 million USD
Website: https://www.centre.io/
• Gemini Dollar – The Gemini Dollar has been launched by the same people who are behind the Gemini exchange. The Gemini Dollar is being issued by the Gemini Trust Company, LLC through the Ethereum network. Collateral behind the GUSD, as it is pegged to USD on a 1:1 basis, are being held by the State Street Bank and Trust Company. U.S. dollar deposit balances are being examined on a monthly basis by the BPM, LLP, which is a registered public accounting firm.
Marketcap: 1.2 million USD
Website: https://gemini.com/dollar/
Variety
Variety is always good, but there is probably a specific reason why exchanges like Huobi are deciding to list all 4 of the alternatives to USDT.
Firstly some of these might not have sufficient liquidity and coins in circulation, meaning that only adding one of the four might not allow institutional and large investors to move ‘fiat’ money to and from the exchange.
Secondly, some of the lot might cater to different audiences, might be regulated on a different jurisdiction and would have different withdrawal procedures. Supporting all of them in the case that all are properly regulated might just be the best choice as those who wish to withdraw and exchange stablecoins to USD now have the opportunity to decide with their best option instead of going with the only one available.
##Our pick
If we had to choose one of the stablecoins to go with we would probably go with Paxos as the company behind the token is one of the few crypto ventures that is regulated and audited under the New York State Department of Financial Services. This means that the company has to fulfill the legal requirements of one of the strictest places on the planet in regards to cryptocurrencies. Additionally all potential losses are insured and accounted for with an U.S. regulated bank, while being able to offer enough liquidity to move funds.
Huobi will allow the trading of the new stablecoins on the 19th of October with no restrictions on deposits, withdrawals and trading. If you are interested in registering to the exchange, feel free to do so via our sign-up link].
As an additional info, we received note that Huobi encourages Institutional traders, acceptance dealers, and OTC market makers to contact them at institution@huobi.com with the subject line “Stablecoin Cooperation” for assistance.