Huobi Global has recently announced to list four USD-pegged stable coins. As per the official communication, the users will be able to make deposits of Circle’s (USDC), Paxos Standard Token (PAX), True USD (TUSD) and Gemini exchange’s (GUSD) starting from Friday, October 19, 2018 (GMT +8).
What is a Stablecoin?
As per Wiki, a stablecoinis any cryptocurrency pegged to a stable asset, such as gold or fiat currencies. Often stablecoins are linked to a Decentralized Autonomous Organization (DAO) which controls issuance and pricing. A traditional stablecoin is backed by a reserve which corresponds to the coins in circulation. The collateral can be a fiat currency, a cryptocurrency or another asset like gold. In theory, a stablecoin will remain constant in price, as it is a representation of a known amount of an asset.
Without a doubt, we can say Tether is the most used stablecoin. Always ranked amongst the Top 10 currency with a market capitalization of over USD 2 Billion, Tether has been in the limelight for misreporting, for not being honest and for its resistance to doing audits of their reserves while continually printing millions of Tethers. On 15th October Tether price dropped to less than $1, leading to a speculation that USDT is not actually backed by USD reserve. As a result, new stable coins have emerged.
Huobi launches 4 stablecoins
In order to provide more options to the customers, Huobi will be launching four stable coins. This will help customers to have more choice when it comes to selecting a stablecoin. Also, Huobi has officially confirmed that USDT will still remain part of Huobi portfolio and there are no plans of de-listing the asset.
Since it’s in the early stages of launch, there may be a liquidity crunch in executing large orders. In this case, Institutional traders, acceptance dealers, and OTC market makers can contact Huobi at institution@huobi.comwith the subject line “Stablecoin Cooperation” for assistance.
The four new stablecoins listed in Huobi are
- Paxos Standard Token (PAX)
Paxos Standard Token(PAX)is issued by Paxos Trust Company. The asset is fully approved and regulated by the New York State Department of Financial Services (NYDFS) and is pegged one-to-one with USD (1 PAX = $1 USD) - USDC
USDC which is developed by Center is a fully collateralized US Dollar stablecoin. The USDC will be pegged at a 1:1 ratio and can use any ERC-20 wallet or service to store the tokens - Gemini USD
Gemini Dollar (GUSD) is issued by Gemini Trust Company is an ERC-20 token. It is pegged 1:1 against the dollar and the dollar reserve will be managed by State Street Bank. To maintain trust and complete transparency, it will be regularly audited by BPM, LLP.
4.TrueUSD
TrueUSD is issued by TrustToken which is a blockchain-based stablecoin similar to USDT. It is an ERC-20 based token and is also pegged to USD on 1:1 basis. The dollar reserve is managed by banking partners in legally protecting escrow accounts and is regularly audited.
Conclusion
Since Tether is going through a tough phase, it is always better to have an alternative. My personal favourite among the lot is Gemini USD. Mainly due to the fact that it is managed by Gemini which is fully registered and compliant with banking standards. This makes it suitable for institutional clients, as well as individuals. If you don’t have a Huobi account click here to own one and start trading stablecoins.