The founders of a $1.45 billion investment firm and a dedicated blockchain fund are teaming up to launch a new cryptocurrency whose value would be pegged to the yen.
South China Morning Post reports that Grandshores Technology Group, a Hong Kong-based blockchain investment firm, is raising HK$100 million (US$12.7 million) to bootstrap the project, which aims to provide traders and other cryptocurrency users with a yen “stablecoin,” whose value would be immune to price volatility in the wider cryptocurrency markets.
Grandshores Technology’s founding partner, Yongjie Yao, is also a founder of $1.45 billion investment firm Hangzhou Grandshores Fund, which has received backing from the Hangzhou government. He said that the fund’s partners are working with a Japanese bank to create the as-yet-unnamed stablecoin, which should launch in late 2018 or early 2019.
“We believe cryptocurrency traders and exchanges will be potential takers of these stablecoin,” he said, adding that Grandshores aims to develop an entire suite of fiat-pegged stablecoins, beginning next with the Hong Kong dollar and Australian dollar.
Notably, Grandshores Technology said that yen-pegged token’s financing round will be denominated in tether (USDT), the controversial USD-backed stablecoin that serves as a proxy for physical greenbacks on many cryptocurrency exchanges.
Speaking more broadly about developments in the blockchain space, Yao told SCMP that he expects blockchain to go mainstream within the next half-decade.
“Blockchain will become the mainstream technology in the next three to five years,” he said. “We are entering the next stage of blockchain evolution, a stage which is akin to when computer operating system was transiting from MS-DOS [disk operating system] to MS-Windows.”
The proliferation of trustworthy stablecoins is viewed by many as an important step in that process, as it would provide users with exposure to some of the chief benefits of cryptocurrency technology (e.g. rapid cross-border settlement) without the price volatility. There are some trade-offs, including the need for stablecoin issuers to adhere to KYC/AML policies and — in some cases — transaction censorability, but institutions and other highly-regulated firms may be willing to make this exchange.
Earlier this month, two New York-based charter companies, Gemini and Paxos, launched USD-pegged stablecoins, which both firms touted as the first “regulated” stablecoins.
Featured Image from Shutterstock