Bitcoin Global News (BGN)
October 19, 2018 -- ADVFN Crypto NewsWire -- Stablecoins are
trustable in principle, but they can still go down due to market
volatility, in connection with other factors. Just look at what has
been happening to Tether recently.
Popular news outlets in the Blockchain industry have been claiming
that Tether may have broken its peg, which means that it is no
longer a Stablecoin, on principle, due to losing its tie to the US
dollar.
Working against this idea is the fact that it is only, today, two
cents under a dollar.
Whatever the truth is on this, Tether has been falling in value and
other Stablecoins have been picking up the slack. In response to
this, as of today, Huobi has announced a new feature for its
exchange users that involves Stablecoins and market
volatility.
More specifically, to allow their users to swap between 4
Stablecoins almost instantly, they have created the equivalent of
their own Stablecoin as a means of exchange.
That’s right.
Now, you can use one Stablecoin to move between four other
Stablecoins.
As to which four are involved, the answer is PAX, TUSD, USDC, and
GUSD. If you do not know what all of these are, to quickly recap,
the first is the Paxos Standard, the second is the True US dollar
from TrustToken, the third is Circle’s US dollar coin and the
fourth is Gemini’s Gemini dollar. Besides Tether, these essentially
amount to the most popular and basically most trustworthy
Stablecoin options that are out there now.
If you are wondering how switching instantly between all of these
projects is an improvement on Huobi’s existing options, it all
comes down to their deposit and withdrawal procedures.
Just as is the industry standard with any project that is not
directly convertible, until today, users had to either switch one
of these Stablecoins to Bitcoin or switch it to a fiat currency,
before investing the same funds in another, similar project. The
problem with this has been the fees involved in doing so, that
every centralized or partially centralized exchange
imposes.
Now, with Huobi Dollar or HUSD, users have a direct medium of
exchange that seems to function as a facilitator of direct atomic
swaps between these coins. If you do not remember what an atomic
swap is, it is enough to understand it as a feature that allows
previously incompatible Cryptocurrencies to be exchange
pairs.
On a deeper level, this is close to, but not exactly the case.
Every time a Huobi user purchases any amount of any of these
Stablecoins, he or she is credited immediately with the equivalent
in HUSD. Think of this like what happened with Bitcoin Cash
directly after the fork, except Huobi plans for this to continue
indefinitely.
Because every user possesses this pair, a pool has been created
which ostensibly includes all of these projects, with the option of
a withdrawal being made at any time, from any one of them, with
HUSD. Logically, this also appears to mean that fees on such
transactions will either be drastically reduced or non-existent
since little real swapping is actually being done.
Going forward, the major questions will likely be: can Huobi
maintain a balance of all of these projects in this pool over the
long term and do they have a legitimate stopgap solution if the
pool becomes imbalanced?
In any case, we at least have a new method of accessing Stablecoins
in a more efficient fashion.
By: BGN Editorial Staff