As the revolution of cryptocurrencies continues, many established companies are looking to enter the digital currency space. However, they are also planning to do it on their own terms, which often includes the launch of their native cryptocurrency. Notably, these companies are opting to go for stablecoins, due to their immunity to high volatility, which is still a problem for every “real” crypto out there.
Even the social media giant, Facebook, is reportedly developing its own ‘Facebook Coin.’ Another company that is quite well-known, and is working on entering the crypto space is Samsung.
With so many firms designing their coins, Binance Research, the market research, and analysis arm of the world’s largest crypto exchange, Binance, decided to look into these initiatives. Binance Research’s goal is to determine what these stablecoins are aiming to bring to the market, and what strategies are they adapting to be competitive in the ever-growing crypto space.
The report also examines recent developments regarding Tether (USDT), the increase in adoption and trading of dollar-backed stablecoins, and more.
Binance Research’s look into stablecoins
One of the significant points that the report has made is that the stablecoin initiative from non-financial firms, notably Samsung and Facebook, might further improve the growth of the cryptocurrency industry. These firms have massive user bases, and introducing cryptocurrency to them could inform and interest many within their communities.
Further, the report notes that these firms are less risk-averse than traditional financial companies – particularly when it comes to disrupting the payments industry. They are also faster when it comes to execution, and may even define crucial future growth drivers for the digital asset and global payment industries.
Stablecoins have been a topic for a while now and were even discussed (in detail) during the recent episode of Binance Podcast, when the company’s CFO, Wei Zhou, spoke about their impact on the world of digital finance. Another thing that the report points out is that the first several months of this year saw large net inflows for most stablecoins, with January 2019 dominating.
In the following months, there were more redemptions than deposits, but stablecoins like USD Coin and Paxos still saw a lot of inflows. On the other hand, controversial Tether (USDT) may have also contributed to the inflows.
Finally, the report also talked about the possible effects of the collateralized stablecoins’ expansion. These are the coins connected to currencies other than the USD. Meanwhile, some possible effects include new global remittance channels, the ability to hedge against fiat currency risk easily, better price efficiency for non-USD crypto exchanges, and the development of blockchain FX exchanges.
The report concludes that collateralized stablecoins continue to gain popularity. However, there are some significant differences between the coins when it comes to a trading perspective. In Bitcoin markets, Tether still dominates with higher liquidity.
As for Facebook’s and Samsung’s coin, their impact remains to be seen. Not much is known about the coins for now, particularly when it comes to Facebook’s pending stablecoin, as the company remains highly secretive about it. However, an accountable impact is expected, particularly when it comes to bringing new investors and traders to the cryptocurrency industry.
Disclaimer: The presented information is subjected to market condition and may include the very own opinion of the author. Please do your ‘very own’ market research before making any investment in cryptocurrencies. Neither the writer nor the publication (TronWeekly.com) holds any responsibility for your financial loss.
