The role of stablecoins in modern finance

adminApril 13, 2024

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Stablecoins, often under scrutiny by financial regulators, are emerging as influential players in the cryptocurrency market. According to Howard Lutnick, CEO of Cantor Fitzgerald and custodian of the stablecoin Tether, these digital assets have proven beneficial for the US dollar. At a recent conference held by Chainalysis in New York, Lutnick emphasized the importance of dollar dominance and discussed the advantages of stablecoins such as Tether and Circle’s USD coin receiving strong support and enhancing the cryptocurrency ecosystem.

Tether ($107 billion), the third-largest cryptocurrency by market capitalization, and Circle’s USD Coin ($32.25 billion) play a pivotal role in cryptocurrency trading, according to CoinMarketCap data. In particular, Tether serves as the digital equivalent of the dollar for cryptocurrency traders and facilitates a significant portion of daily Bitcoin trading volume and up to 70% of the trading volume of other major cryptocurrencies.

We previously discussed how Tether achieved market dominance in its sector and its mechanisms for price stability. The way Tether maintains price stability is through a process where each time Tether issues a new USDT token, the company allocates an equal amount of US dollars to its reserves. This ensures that these tokens are fully backed by cash and cash equivalents. It is generally believed that these connections are the reason behind the stability of the coin. Other stablecoins use similar methods of maintaining price stability, typically including asset backing through reserves.

Impact and controversy of stablecoins

However, Lutnick expressed doubts about central bank digital currencies (CBDCs), suggesting that digital dollars could be perceived as a surveillance mechanism in countries such as China.

Cantor Fitzgerald CEO Howard Lutnick supports stablecoins and tokenization of financial assets, citing economic benefits and concerns about CBDCs https://t.co/RQhAZnB4AL
— crypto.news (@itscrypto_news) April 10, 2024

The controversy surrounding stablecoins stems from their inherent nature. These are cryptocurrencies pegged to traditional currencies, commodities such as gold, or other financial instruments. The U.S. Securities and Exchange Commission (SEC) argues that stablecoins should be classified as securities and fall under regulatory scope. This position has led to numerous lawsuits against stablecoin issuers for violating laws intended to protect investors.
The SEC’s skepticism is not without reason, especially considering the stablecoin sector’s past crimes. For example, Terraform Labs’ TerraUSD, an algorithmic stablecoin, was at the center of a multibillion-dollar fraud in 2022 that caused significant disruption in the cryptocurrency landscape and resulted in CEO Do-won Kwon becoming a fugitive.
Aside from their controversial aspects, stablecoins also have the potential for tokenization of tangible assets. Lutnick highlighted the future potential of blockchain technology and stablecoins in finance, suggesting that they could soon facilitate the tokenization of assets such as bonds. This view is consistent with statements by BlackRock, which has consistently advocated for digital asset strategies, including the launch of ETFs and tokenization of financial assets.
In summary, while stablecoins face scrutiny and regulatory challenges, their role in strengthening the U.S. financial system and pioneering asset tokenization continues to attract attention among industry leaders and investors.

Cosmo’s Odyssey: The Beginning of the Dogeverse and the Multi-Chain Saga

In the dynamic world of cryptocurrency, Dogeverse has emerged as an attractive new competitor that differentiates itself through its unique chain hopping capabilities. This innovative meme coin, represented by Cosmo the Shiba Inu, is not just another coin added to the cryptocurrency zoo. Existing on six different blockchain networks, including Ethereum, BNB Chain, Polygon, Base, Solana, and Avalanche, Dogeverse offers an unparalleled level of interoperability and accessibility.

Dogeverse’s journey from a simple meme coin to a potential powerhouse in the cryptocurrency space is driven by its multi-chain capabilities. This approach not only broadens appeal across a variety of user preferences, but also serves as a unifying force in an often fragmented blockchain ecosystem. Whether users are drawn to Solana’s low transaction costs, Ethereum’s solid reputation, or curiosity about a new native chain, Dogeverse is ready to welcome them with open arms.

One of the most attractive aspects of Dogeverse is its ability to foster community among diverse blockchain users. By leveraging cross-chain bridges such as Wormhole and PortalBridge, we aim to alleviate the competition that sometimes arises between different blockchain communities. This, combined with the fascinating lore surrounding Cosmo, has the potential to elevate the Dogeverse beyond the performance of previous meme coins like Dogecoin.

At the heart of Dogeverse’s appeal is Cosmo’s legendary adventures and the living lore that invites users of each blockchain to contribute their own stories to the mythology. This will not only enrich the story behind the project, but also enhance its appeal and appeal, setting the stage for Dogeverse to become a mythical figure in the cryptocurrency world.

Dogeverse’s pre-sale will consist of 10 stages, with the token price gradually increasing from $0.0000290 in the initial stage to $0.000299 in the final stage. With a total supply of 200 billion tokens, 30 billion will be allocated for pre-sale, with a soft cap of $8.83 million and a hard cap of $170.02 million. Amazingly, Dogeverse has already generated over $300,000 in revenue on the first day of pre-sale, indicating strong enthusiasm in the market.

For those interested in the promise of Dogeverse and its new approach to blockchain interoperability, you can participate in the presale at thedogeverse.com. The project not only promises immediate benefits through versatile usability across multiple chains, but also holds potential for long-term growth as it works to bridge gaps within the blockchain community.

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