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Tether News - Tether’s Transparency Praised by CEO of Crypto Investigation Firm Chainalysis

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Michael Gronager, the CEO of Chainalysis, claims that they failed to detect anything alarming about Tether
Tether’s Transparency Praised by CEO of Crypto Investigation Firm Chainalysis
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Chainalysis, the Blockchain analysis startup that provides valuable insights into the industry, has notched $30 mln during its Series B funding round. In his interview with Fortune, Chainalysis CEO Michael Gronager emphasized the importance of dollar-pegged stablecoins for the cryptocurrency industry, praising Tether for having ‘quite good’ transparency.

Michael Gronager

The stablecoin effect

Stablecoins, according to Gronager, are emerging as a new major trade after the great ICO bubble eventually popped. Gronager claims that he’s ‘confident’ in the majority of fiat-backed cryptocurrencies, including the flagship stablecoin — Tether (USDT). U.Today reminds that the flagship stablecoin has been placed under scrutiny after a controversial report about how USDT was used to manipulate the Bitcoin price. There are a lot of speculations whether or not Tether is backed by sufficient USD reserves.

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The rise to prominence   

Back in April 2018, Chainalysis wrapped up its Series A funding round, raising $16 mln. The company developers software that allows government and law enforcement to monitor Bitcoin transactions. Chainalysis, which was founded back in 2014, appeared in the limelight after cooperating with law enforcement on the Mt Gox investigation.

Apart from Bitcoin, they started adding a slew of new coins. When it comes Zcash and Monero, Gronager can do very little about them, but the pace of their adoption is way too slow to be concerned.         

Prioritizing long-term growth

Now, according to the company’s CEO, they mainly rely on corporate clients. However, they are still not able to generate profit, currently focusing on the build-out instead. The Blockchain sleuth will reportedly use the raised funds to open a new London-based office.

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Yuri Molchan

Tether News - Question of the Day: Can Stablecoins Accelerate Cryptocurrency Adoption?

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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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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