Increased Competition for Tether as Another Stablecoin Goes Live Offering Better Transparency
Stably has launched its fiat-collateralized stablecoin – StableUSD (USDS). Potential clients can participate in the early access to purchase and redeem the USDS tokens tethered to the US Dollar
StablecoinUSD: Offering Stability and Transparency
The startup announced the launch via a post on its medium account. According to the announcement, the stablecoin utilizes a centralized model to peg its token 1 to 1 to the US Dollar. Like other stablecoins, the USDS tokens will help crypto traders preserve value in the face of market volatility. However, Stably envisions a future where its tokens will facilitate cross-border payments. The stablecoin will serve as an alternative for government-backed currencies in developing countries.
To provide a high standard of transparency and trust to its customers Stably is partnering with the Nevada-based trust company, Prime Trust. The dollar reserve backing every stablecoin in circulation will be kept in the fiduciary custody of Prime Trust. Beyond partnering with a regulated trustee, Stably will publish weekly audit reports of its US Dollar escrow holdings. Users of its platform will be able to monitor the escrow balance in “real time” through live feeds provided by Prime Trusts’ APIs.
Stably’s blockchain-powered platform will utilize smart contracts to generate USDS tokens on receipt of funds from interested users. Other than the US Dollar, clients can purchase USDS with Bitcoin, Ether or Tether. In instances where any of these cryptocurrencies is used for a purchase, they will be exchanged for the dollar on an open market and deposited with reserve custodian. Interested clients must provide personal and financial information for KYC/AML purposes when registering on the platform.
The Emergence of Stablecoins
Stablecoins are all the rage in the crypto industry this year. Merging the digital transferability of cryptocurrency with the relative stability of fiat currencies, stablecoins create new potential for digital currencies. With the launch and success of Tether, other companies are launching similar projects. Notably Circle’s USDC, Winklevoss’ Gemini Coin and Paxo Standard.
But in recent months, Tether has received negative feedback over its inability to provide audited records of its fiat reserve holdings. Last month, amid fears that Tether did not have the Dollar reserves for all its tokens in circulation, traders rushed to liquidate their USDT holdings, causing the token value to drop by $0.10.
However, on November 1, Tether Ltd published a letter from its reserve custodian showing its escrow reserves of $1,831,322,828.