Co-founder of Australian based cryptocurrency exchange CoinJar has stated that stablecoin is a game changer for the industry and that the potential use cases are much more than we know, The Australian Financial Review reports.
Stablecoins are cryptocurrencies created to combat the volatility of the market by creating a token that can be converted into other tokens but with a fixed rate. The most popular stablecoin is Tether, the tenth most traded cryptocurrency in the world by market volume, according to CoinMarketcap. However, Tether has had its fair share of troubles ranging from transparency and manipulation allegations. Other stablecoins that have popped up to replace Tether includes Gemini USD, owned by the Winklevoss twins, Paxos Standard and True USD.
Tan, who is not actively running Melbourne based CoinJar, said stablecoins, which helps you “transfer money around the crypto ecosystem at a stable rate” is “on everyone’s lips,” adding that “there’s a whole lot of applications or use-cases that could come out of it.”
The Aussie entrepreneur argues that the stablecoin idea might be attracting both retail and institutional investors now, but it’s been around for a while.
“In London, I see a lot of finance people getting into it. People with 10, 20 years of forex experience are trying their hand at it. It’s drawing a lot of people from traditional financial circles, just because it’s interesting, it’s intriguing, there’s a lot of upside to it.”
CoinJar will also consider the possibility of floating a stable currency, although the market has a number of players in that circle, Tan noted in the report. He went on to add:
“There are a few Australian stablecoins already – I think there are three or four out there. I think many of them would be happy for us to utilize them. The question is, how do we try to leverage some of these things to provide a better user experience for our users?”
For many investors looking at stablecoins, the lure is the ability to participate in the crypto market without being exposed to the extreme volatility that comes with it. For others, it’s the desire to use cryptocurrencies as a medium of exchange and not just an object of speculation—which bitcoin is notoriously known for.
Tan believes, while bitcoin might be used by a large majority of users for speculation, quite a number of holders use it as a medium of exchange and store of value. He went on to state that the perception around bitcoin continues to change and this has affected how the market views it.
Tan’s company is planning to expand into Europe, which he says CoinJar prefers as it’s more regulated and particularly interesting to them, compared to Asia, where there is ” fragmentation – all the different regulators, the cross-border challenge.”
Earlier this year, CoinJar launched Australia’s first cryptocurrency index fund, offering wholesale investors with net assets of at least AUD$2.5 million exposure to cryptocurrency while shifting the custody responsibility to CoinJar.
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Last modified: June 10, 2020 1:38 PM UTC