Australia Lays Groundwork for Nation’s First Stable Coin

On Stable Footing

Two Australia enterprises are set to offer Australia’s first stable coin. Domestic crypto exchange Bitrade and blockchain employment platform Emparta have announced their ambitions, with a prototype being worked on as we speak. There’s a tentative launch date of 2019, and a promise this coin will be fully redeemable on demand – a key point of difference between this coin and the well known Tether. News of this stable coin not only kicked off new excitement around an Australian Dollar (AUD) stable coin, but also new anticipation for what it signifies for the future of the Aussie crypto sector as a whole.

What Is a Stable Coin?

Even among crypto enthusiasts there can be confusion about what exactly a stable coin is. A stable coin is a crypto that is pegged to another asset — usually a fiat currency or a precious metal like gold — that seeks to provide its owners a greater stability than can be found with cryptos like Bitcoin and have experienced great bouts of volatility.

The key selling point to the advocates of a stable coin is the offer of improved transaction speeds, but without the volatility that even keen crypto enthusiasts can feel the frustration (not to mention the financial pain) of.

To be a true stable coin, an issuer must hold a substantial reserve of the asset (the fiat currency) it is pegged to in reserve. This permits redemption of stable coin funds for the fiat currency should it be required.

The USD and the the Euro already have a comparable stable coin‚ and this latest news promises to represent an exciting new chapter for those who adore cryptos not only for their technological application, but potential to spur debate on monetary regulation and policy.

This said‚ one need only take a cursory glance at the robust and divisive debate surrounding Tether — the stable coin (ostensibly) linked to the USD — to know the emergence of a new stable coin is unlikely to be a controversy-free affair.

gold Persian coin
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Gold, the oldest and most stable of currencies. Image credit: By Deflim – Own work, Public Domain, https://commons.wikimedia.org/w/index.php?curid=3528525

The AUD Ascent

Though the Australian dollar doesn’t carry the same financial firepower as the USD or Euro on the global stage, it is ranked within the top 8 most tradeable currencies by Investopedia.

This not only means that currency traders will watch the AUD daily with hawk eyes‚ but also speaks to the prestige of the Australian economy generally. For a nation with relatively small population of 25 million‚ its long standing strong economic performance has garnered acclaim globally‚ and has led to a ranking of 13th by GDP in the world.

A Secure Foundation for the Future

While the emergence of an Australian stable coin is huge on its own‚ it is also a further sign of a new era underway in the Australian crypto sector.

While the national government in Canberra can’t claim global leadership of pioneering crypto embrace like Malta or Japan have‚ recent times have seen the government cultivate real engagement with the crypto and blockchain sectors.

Should the stable coin find a strong reception on launch‚ it shall provide another card for crypto enthusiasts to use as they seek to drive Canberra towards a more open embrace of cryptocurrency in the regulatory sphere.

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Ed Kennedy
Ed Kennedy is a journalist at BlockTelegraph News and a web developer from Melbourne, Australia. A keen technologist with an enduring interest in the rise of a truly digital global economy, Ed is passionate about the transformative potential blockchain offers our world.

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