On June 18, Facebook (NASDAQ:FB) officially confirmed its plans to launch the corporation’s proprietary cryptocurrency, Libra, sometime next year. This announcement sparked heated debates throughout all major media outlets of the world, as well as within the political circles of the developed countries. So, what is this currency and why it has stirred such a controversy?
Libra is not a cryptocurrency in the classical sense of this term since it is most likely to be heavily centralized and protected against high volatility that is inherent to Bitcoin, Ethereum and nearly all other cryptocurrencies for that matter. Rather, the brainchild of the social media behemoth belongs to the emerging class of crypto money that is called stablecoins.
It is quite obvious from their very name, stablecoins are void of huge price swings and resistant to various “pump-and-dump” schemes because their rates are pegged to the value of “stable” fiat currencies, such as U.S. dollar, euro, British pound, etc., or even precious metals like gold, silver and platinum.
Since it was announced that Libra will be pegged to an entire “basket” of conventional currencies, which would presumably be comprised of the mentioned three currencies plus the Japanese yen, Facebook might be well on its way to creating a flagship coin of the entire class of cryptocurrencies.
Stablecoins are on the march, governments are crying foul
Stablecoins are on the march, governments are crying foul
Since this new type of blockchain-enabled assets has literally taken the best of both worlds of traditional money and crypto, it seems only natural for the governments of nearly all developed countries, which exercise control over the global financial system, to begin voicing their concern regarding stablecoins, and Libra in particular, which are gaining momentum and threaten, at least in the minds of crypto opponents, the established sovereign financial systems.
The Libra Association, or Calibra, a blockchain division of Facebook headquartered in Switzerland, came under a barrage of criticism immediately after the aforementioned announcement. The highest U.S. officials, the members of G7, and the representatives of the European financial ministries all began to lambast Libra, and went as far as organizing the hearing of the U.S. Senate Banking Committee, where they flung mud at David Marcus, the head of Calibra, in an attempt to convince the public of the threat that Libra poses to the financial system.
But despite these desperate measures, it is highly unlikely that they would be able to halt the growth in popularity of Libra and other stablecoins, which emerged before it, like USD Tether, True USD, Paxos, USD Coin, DAI. Stablecoins have already become an integral part of the global cryptocurrency ecosystem, and their impact will continue to grow. Their mission is not to replace the major cryptocurrencies like Bitcoin, Ethereum, and others, but to counterbalance their volatility.
Stablecoins represent a favourable exchange medium, which allows both crypto traders and holders to mitigate risks associated with the volatility of conventional cryptocurrencies. In layman’s terms, with stablecoins, one can easily exchange Bitcoin, once its price begins to drop, to Tether, which is pegged to USD, thus save the crypto portfolio from melting and preserve its dollar value. Moreover, stablecoins can also be used as the units of account for various business purposes since the seller can rest assured that the price of these currencies will remain unchanged during the transaction time.
1xBit keeps abreast of the trend
It is obvious that the world is currently witnessing the inception of the mass adoption of cryptocurrencies, and stablecoins will play a major role in this process. The team behind 1xBit is comprised of forward-thinking people, who understand the occurring trends in the crypto space. That is why we are glad to announce that 1xBit has added USD Tether, USD Coin, True USD, and the Paxos standard token to our list of deposit options.
So now, all holders of these stablecoins will get a chance to bet on sports, play online casino games and a plethora of slot machines without having to convert stablecoins to other cryptocurrencies. Also, keep in mind that we offer a massive welcome bonus package up to 7 BTC to all newly registered users. 1xBit continues to broaden the scope of its services and always welcomes all crypto enthusiasts.