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LTC Price Predicted to Keep Rising After Sparking Crypto Spring — Five Positives from Litecoin
LTC Price Predicted to Keep Rising After Sparking Crypto Spring — Five Positives from Litecoin

Central Banks — One Step Closer to Creating Crypto?

  • Thomas Hughes

    IMF Chief said in a speech that central bank digital currencies (CBDC) could be a good solution to some of the problems faced by the banking sector

Central Banks — One Step Closer to Creating Crypto?
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IMF Chief Christine Lagarde said in a speech that central bank digital currencies (CBDC) could be a good solution to some of the problems faced by the banking sector. This is good news and was followed up by three central banks with propositions to use CBDC for cross-border payments.

Central banks in Canada, Singapore, and the UK issued a report, noting that various CBDC models could be used to overcome various problems such as going through multiple intermediaries and other time-consuming hurdles. If this comes to fruition, it remains to be seen how it will affect the current crypto market.

Charts at a Glance – BTC/USD

Charts at a Glance – BTC/USD

After dropping to a low of 5188 against the US Dollar, Bitcoin showed rejection at around 5200 by printing two 4-hour candles with massive wicks in their lower part. This is a sign that the sell-off may come to an end or at least that 5200 is strong support for now.

The Relative Strength Index is deep in oversold territory (below its 30 level), which is a fact that, combined with the support at 5200, could push the pair higher. Currently, one BTC is worth 5,540 US Dollars; the next level of interest is located at 5800, so it’s not such a big distance to travel and could be reached over the weekend.

Support zone: 5200 as technical support and 5000 as a psychological level

Resistance zone: 5777 - 5800

Most likely scenario: bounce higher, with 5800 as the target

Alternative scenario: new attempt to break support (5200)

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Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

  • Yuri Molchan

    Stablecoins show hardly any volatility compared to Bitcoin and altcoins, many are hoping that they will be able to bridge new crypto economy and regular fiat money

Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?
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Contents

Bitcoin, the father cryptocurrency, emerged in hope that it will remove all intermediaries in electronic commerce that cut off their share of payments. BTC was perceived as a P2P way to replace fiat cash in an electronic format, which would enable one party to pay another without any financial institution or payment platform which would demand its share of a transaction as a reward for its services.

What is wrong with Bitcoin

For quite a while Bitcoin was performing the way the crypto community expected. But the situation changed later – BTC rate became weaker, thus bringing down its financial and economic reliability, when it gets to be used as a regular means of payment.

You cannot have a currency that would cost like a British castle today, a gram of gold – tomorrow and a pack of French fries the day after.

At that point practical fintech minds came up with an idea of creating something which would become a breakthrough in the universe of crypto – a so-called stablecoin.

Will stablecoins solve the volatility problem?

Technically, stablecoins are protected from the volatility roller-coaster that Bitcoin and other cryptos love to ride. They are programmed to keep their prices stable and investors now are largely attracted to this new type of digital assets.

Stablecoin does not show any volatility in its monetary value, since it has a fixed connection to an asset it is pegged to. The major goal of using stablecoins is taking the best from decentralized crypto coins and combining it with a constant value. Thanks to it, stablecoins can be used as a reliable means of trade.

Asset-pegged stablecoins

Asset-backed ones get their value from an asset as can be understood from the name. An asset provides the necessary value to a coin, as well as the necessary legitimacy.

A great example of an asset-pegged stablecoin is Tether (USDT). In spite of a series of scandals at the end of last year, it remains the most popular stablecoin in the crypto market.

Recently, it has partnered with the Tron Foundation to launch a Tron-based stablecoin.

Other examples are TrueUSD (TUSD), USD Coin (USDC), the Gemini Dollar (GUSD), and the Paxos Standard (PAX). They are all pegged to the USD.

Crypto-backed stablecoins

Some digital coins work in a similar way to fiat-backed ones, however, they are pegged to collateral crypto. That means that crypto assets that ensure the value of such stablecoins are stored in a wallet similar to escrow.

A good example of a crypto-pegged token is Maker, which is ranked 16 on CMC.

Algorithmic stablecoins

Even though, stablecoin can be interesting at first thought but the way they are built goes against the principle of decentralization that crypto coins have as a foundation. Thus, many crypto fans and evangelists are positive that stablecoins must be linked towards not a centralized asset but a computer algorithm which takes value from a balance between supply and demand.

Basis is now considered the most promising algorithmic stablecoin of all.

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Can stablecoin ensure smooth future for the crypto industry?

The primary goal of all crypto assets was and remains to come up with virtual asset that would be liquid enough and not vulnerable to market volatility. From this point of view, stablecoins are a dream of all crypto fans and evangelists of a decentralized economy.

Apart from the potential to conduct crypto transactions smoothly, experts believe it can bridge the two worlds – fiat and crypto, bringing them a mutually beneficial coexistence. However, that may take time.

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