The cryptocurrency scene seems to be moving at a speed that has many confused. Under only 10 years in existence, the market has seen huge steps in performance and introduction of new products and services. Hot in the headlines is the stablecoin fever which apparently is officially embraced in the UK.
A recent report by CCN indicates that the stablecoin niche is filling up with unprecedented speed. According to the publication, the market is populating with offerings every other day.
Cryptopound
The publication details that a stablecoin is a cryptocurrency that has its value corresponding to fiat currency. Also, the value can correspond to any other commodity that can store value. Normally, the correspondence is on a 1-to-1 basis.
Interestingly, media reports indicate that the stablecoin fever has officially made landfall in the UK. According to Ethereum World News, the London Block Exchange (LBX) intends to issue the first pound-linked cryptocurrency globally. Particularly, the cryptocurrency startup intends to expand its service range from simply a “bare-bones cryptocurrency exchange.”
As per the LBX blog post, the start-up is launching the first ‘Cryptopound’ to feed the growing appetite for stablecoins. Specifically, the new offering intends to correct the poor crypto-products in the market today. According to the statement, the start-up hopes to bring more transparency in the market that only knows opaque business processes.
The statement elaborates further:
“Through opaque management structures, distribution schedules and auditing processes, many available stablecoin offerings are inadequate for the needs of businesses, traders and consumers.”
In this view, LBX inclines to offer products that can earn customers’ trust. To that end, LBX will manage the LBXPeg, “in a correct and compliant manner.”
Stablecoin Fever Reaches UK amid Overpopulation Claims
Further, the blog post details that the LBXPeg will enable users to transfer digital assets in terms of GBP globally. The new service ensures that the digital assets transfer is “traceable and trustless.” As such, users will enjoy flexible payments options to merchants.
However, the introduction of the new stablecoin is raising more concern to market observers. According to media reports, the number of stablecoins is rising alarmingly. As per the knowledgeable observers, overpopulating the stablecoin market will lead to over-capitalization. As a result, the over-capitalized segment will experience poor returns on investments.
Nonetheless, the stablecoin niche is still doing well and shows potential for better future performance. This may be a result of being the only cryptocurrency market segment that satisfies regulatory requirements. On top of that, stablecoins have stable prices and offer more investor security.
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