Chinese Crypto Billionaire Developing New Stablecoin

[Leonardo]

Cryptocurrency, Stablecoins–While most investors will remember 2018 as one of the worst bear markets for cryptocurrency, those on the development and adoption side will hail it as the year of the stablecoin.

As Bitcoin slips below $4000 again to put an exclamation point on its worst month of losses since August 2011, the landscape of price anchored stablecoins is becoming a more attractive alternative to developers and those looking to integrate cryptocurrency in a mercantile manner that does not involve price speculation. Most investors have become familiar with Tether and the USDT currency, which is currently the seventh largest crypto by market cap (having flipped Litecoin earlier today). With over $1.8 billion worth of USDT minted and disseminated on the market, Tether has managed to provide a price stable coin that is pegged to the value of a single U.S. dollar. However, the company has also been embroiled in a series of controversies, ranging from its somewhat controversial relationship with Bitfinex, to questions regarding the exact bank holdings–including the amount held in reserve that is supposedly backing each USDT.

With Tether failing to inspire investor confidence relative to its position on the market capitalization rankings, it leaves the door open for more enterprising individuals to invest in the development of new stablecoins. On Dec. 3, Chinese cryptocurrency billionaire Li Xiaolai announced the creation of a stablecoin project that would operate within the Hong Kong based blockchain fund Grandshores Technology. Rather than just paying for the project, Xiaolai is going to have a hand in the development of the currency, including the launch of the coin. Xiaolai is also experimenting with the creation of a DAG-based database and other blockchain products, in addition to the aforementioned stablecoin.

While the announcement did not include details into how the stablecoin’s value would be pegged–whether they would opt for a traditional fiat currency or follow the route of other coins in mirroring that of precious metals–the press release stated that it would focus on global, mainstream currencies. Previous reports from Grandshores Technology included the creation of three stablecoins, with values tied to the Japanese yen, the Hong Kong dollar and the Australian Dollar.

However, the currency being led by Xiaolai may constitute a new entity, or a division of one of the already announced projects. Despite being in the driving seat for the project, the announcement comes just months after the billionaire investor made public that he would no longer invest in blockchain-based projects due to the lack of regulation and regular criminal activity, including hacking, associated with the industry.

Give the current state of Bitcoin and altcoin prices, and the general downward trajectory for the crypto markets, it’s no surprise that focus has shifted to the less-price volatile field of stablecoins. While economists have pointed out the problems involved in pegging an external fiat to a digital asset, and whether governments will continue to allow such an occurrence to happen, it has provided a renewed interest in development for blockchain based tokens–even if they lack the price appreciation and market valuing that has become integral to Bitcoin’s image.

Source: https://ethereumworldnews.com/chinese-billionaire-stablecoin-2019/