In an announcement last week, the Gibraltar Blockchain Exchange, a highly respected, regulated and insured cryptocurrency exchange, stated that it is now to list five key stablecoins on its DAX – Digital Asset Exchange. Customers will now have the option to trade the following stablecoins:
- PAX – a USD backed stablecoin redeemable on a one-to-one basis so that 1 PAX is always worth 1USD
- DAI – pegged to the USD and one of the first stablecoins on the Ethereum blockchain
- USDC – also an Ethereum based stablecoin developed through a collaboration between Coinbase and Circle and is backed by USD on a one-to-one redeemable basis so that 1 USDC is worth 1 USD
- GUSD – a USD backed and US regulated stablecoin created by Gemini
- TUSD – by TrustToken, an ERC-20 token backed by USD and verified by third-party confirmations.
In a bid to encourage take-up of trading in these top-level stablecoins, the GBX has offered all users 30 days fee-free trading for all the stablecoins on the DAX. This period commenced on Wednesday 13thMarch and is set to conclude on Thursday 11thApril.
Each of the five stablecoins will be paired against ETH, BTC and the USD is the fiat currency.
Increasingly in demand, stablecoins, as the name suggests, introduce a degree of stability to the volatile cryptocurrency markets. Stablecoins are a type of cryptocurrency that are pegged to the value of an underlying asset and their value is kept stable in relation to that underlying asset. These assets therefore have already been attributed with a value and may be assets such as fiat currencies, commodities such as gold or oil, or even real estate.
The benefits of stablecoins include the fact that, like other cryptocurrencies, they are cryptographically secure, can be transferred easily and rapidly between parties, and anyone with internet access can create a wallet and own a portfolio of stablecoins. They are not subject to the intense fluctuation in price that are experienced by cryptocurrencies, which have a limited maximum supply. Instead the fact that stablecoins are pegged to the value of the underpinning asset creates stability. These features of stablecoins can potentially provide a boost to the greater adoption of cryptocurrency.