Still the most popular “stable cryptocurrency”, Tether, is experiencing a clear crisis of confidence among investors. Is this the beginning of the end of stablecoins?
A bit of history
Tether (USDT) was established in July 2014. It was supposed to be a digital token, which was supposed to reflect the value of the collateral (US dollar) in a ratio of 1: 1. His co-creator was Brock Pierce, whom more people today can associate with the EOS project.
Tether was one of the first stablecoins. It was to provide stock exchanges from the digital currency market with the possibility of offering alternatives to the dollar without complying with regulatory standards. In practice, it caused a lot of controversy (economic and legal), which led to a decrease in the trust of the community in relation to the project and the idea itself. This in turn was the reason for the actual drop in the exchange rate from $ 1 to 93 cents on Monday October 15. The capitalization also dropped by 100 million dollars on Tuesday 9 October, to 2.7 billion. On Sunday, October 14, there was a drop below $ 2.5 billion.
Beginning of the end?
Is this then the beginning of Tetra’s end, or maybe the very idea of stablecoins? If, for example, in 2012 bitcoin fell, it could stop the development of cryptocurrencies. Today it is less likely. Similarly with Tether. Although the market for “stable cryptocurrencies” is still young, taking into account the fact that it is strongly linked to the global scene of digital currencies, it is unlikely that the idea itself will be lost. The more so that even the first bold ideas about stablecoins appear in Poland.
Stablecoin was also supposed to be dPLN. The project of the Polish Technology Accelerator Blockchain was to be created this year. Unfortunately, as a result of problems that occurred during its implementation, the idea was not completed. It is a pity, because the cryptocurrency created in this way was to be based in the Polish zloty. As the creators assured (including Prof. Krzysztof Piech) it was also to be deprived of speculative features, and its course would be related to the exchange rate of the Polish fiat currency.
However, this is not the end. Works on the next stablecoin are underway, this time under the Fiat Based Token team. The project is supposed to concern not only stock exchanges, but a wider issue, which are smart-contracts. Let’s give voice to the CEO of Sonia Targosz:
“Smart-contracts have the potential to automate many processes. Currently, they can only be settled using cryptocurrencies and are not easy to use. ”
The problem is therefore diagnosed. How to solve it? Just using stablecoin!
– Fiat Based Token is a FinTech project. Our goal is to build an innovative payment application. It is to act as a personal account and thus enable easy settlement of smart contracts using Euro-type currencies – Sonia Targosz explains.
So, will we finally get a Polish stablecoin that will succeed abroad? What fate awaits Tether? Certainly, the mistakes made by its creators will be a valuable lesson for other bands that will want to create stablecoiny.