Digital currency tokens that are pegged to the value of major fiat currencies enjoyed healthy trading volumes in 2018, by they could really take off this year. So-called “stablecoins” such as Tether and USD Coin made significant headlines last year, but questions remain about the future of these tokens. Interest by investors has been rising gradually, but active traders feel that stablecoins do not offer too much excitement, at least when compared to more valuable and volatile tokens such as Bitcoin and Ethereum. With all this in mind, here are some possible scenarios for the stablecoin market in 2019:
Transparency Will Be Key
The most visible stablecoin, Tether, is having a crisis of trust. This cryptocurrency, which trades under the symbol USDT, has been facing many questions related to its solvency and backing. As of mid-January, nearly 5 percent of all Bitcoin transactions involved the use of Tether, and this is despite serious doubts about the cash reserves of this digital currency project. USDT actually enjoys greater circulation than Bitcoin because it is easier to do retail consumer match when the value of USDT/USD will always equal $1, but skepticism surrounded this token for most of 2019.
Circulation Will Be Crucial
Facebook’s first formal foray into the cryptocurrency market may involve a stablecoin. Rumors about Facebook developing its own WhatsApp coin for the purpose of competing in the lucrative world of international remittances have been bubbling up since 2018; however, the hearsay has recently expanded to include potential strategies. The blockchain portion appears to be in place, and Facebook’s test market will likely be India, a country that is very active in terms of remittances.