Does the world need more stablecoins? Yes, according to venture capitalists, they have invested hundreds of millions of dollars in projects that develop stable or low-volatility digital assets. Their $ 45 million investment in stablecoin projects promised in 2019 brings venture capital over the past two years to over $ 200 million.
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Stablecoin market is full
Stablecoin projects require venture capital companies. Just as venture capital companies need cryptocurrencies that have a high chance of being adopted by the public, stablecoins seem to be more secure than altcoins. Given the nature of these digital assets linked to fiat currencies excludes the possibility of price appreciation, public token sales are prohibited. Instead, the venture capital of investment companies that often seek equity investment and focus on cryptocurrencies is the preferred way to obtain stable currency financing. Here are some of the stablecoins or "stable" digital currencies that have emerged this year through access to venture capital.
Saga (SGA) is a digital token designed to be used as a universal global currency. Backed by a basket of currency reserves, it will gradually provide attractiveness through a currency model that restricts circulation. Saga's designers aim to create low-volatility tokens with "reliable value", governance and regulatory compliance. The project started this month and raised $ 30 million in 2018 with support from Lightspeed, Mangrove Capital Partners and Vertex Ventures.
The stablecoin project Terra raised $ 32 million from a seed round of funding in 2018.This seed round investment came from four of the six largest cryptocurrency exchanges, including Binance Labs, Okex and Huobi Capital. Terra is working on a stablecoin and blockchain payment solution that has been integrated into the Terra Alliance, a global alliance of e-commerce partners similar to Libra.
Ava Labs abandoned the stealth model in May this year and officially entered the public eye. It has now raised $ 6 million in seed funding. Although not a stablecoin, its DLT payment network aims to achieve rapid asset settlement including stablecoins and legally callable assets. Ava bridges private and public blockchains and allows the creation of customizable markets to deploy and exchange assets in a compliant manner. The project is the brainchild of cryptographer Professor Emin Gün Sirer. The CEO of Ava Labs of Turkish origin highlighted another new stablecoin, Bilira, on Twitter on December 4th, a digital token linked to the Turkish Lira.
Ampleforth is not a stablecoin or a pure cryptocurrency, and its volatility is very low. It is achieved by expanding and limiting the supply to control the price. The project raised $ 9.8 million in seed funding.
Monerium, a blockchain-based e-money project, has raised $ 2 million this year with the participation of Consensys and Hof Holdings. The Icelandic startup intends to issue asset-backed electronic money that is transferred on the chain and can be exchanged for fiat money.
The Paxos Standard (PAX) stablecoin was developed after obtaining $ 65 million in Series B funding in 2018 with participation from RRE Ventures, Liberty City Ventures, and Jay Jordan. Earlier, a round of financing of $ 28 million was obtained.
Goldman Sachs-backed cryptocurrency startup Circle raised $ 100 million in spring 2018, a portion of which was used to create and issue its USDC stablecoin. Since then, this stablecoin has been added to dozens of exchanges, wallets and lending platforms. Although it failed to give Tether (USDT) a punch, it still found its place in the stablecoin field, and Tether still dominates Stablecoin market. In March this year, Circle revealed that it hopes to raise another $ 250 million.
Other stablecoin funds raised include xDai, which in August received $ 500,000 in investment from NGC Ventures, B-Tech and Bixin Invest. Earlier this year, Kava Labs also received $ 1.5 million in funding from Ripple's Xpring program and Coil to launch the USDX stablecoin.
Over the past two years, venture capitalists have invested more than $ 205 million in stablecoin projects, of which $ 45 million is in place this year. Stablecoin raised more funds last year, but the number of new projects has not decreased. Many new stablecoins this year were issued by exchanges themselves, eliminating the need for venture capital. In addition, the $ 205 million figure does not include venture capital funds injected into Facebook's Libra program: Libra was reportedly seeking $ 1 billion in financing in April.
With the release of new stablecoins and "stable" cryptocurrencies, the operation of Libra and 69% of the central bank's operations on the central bank's digital currency (CBDC) have laid the foundation for the upcoming global currency war. Contrary to the fiat currency competition with the US dollar, we will see digital tokens-some are backed by assets, others are backed by collateral and other algorithms control digital tokens. However, their compliance and regulated nature means that no matter what happens, they will not be able to replace Bitcoin.