FTX CEO Sam Bankman-Fried (SBF) made this known in a recent interview with The Big Whale. According to him, “it is very likely” that FTX creates a stablecoin. He hinted that his company will make an announcement soon. The importance of stablecoins to the crypto ecosystem cannot be overemphasized and despite the fact that we have seen stablecoins depeg on numerous occasions, they still remain the “heart and soul” of a seamless crypto trading experience and provide a safe haven for crypto investors trying to shield themselves from the volatility of other cryptocurrencies.
What Are Stablecoins?
Stablecoins are digital currencies whose market value are pegged or tied to a reference asset like the U.S dollar or gold in order to control its supply and reduce volatility when compared to cryptocurrencies like Bitcoin and Ethereum. Besides acting as an hedge against the crypto market’s volatility, stablecoins are also which connects fiat currencies to the world of cryptocurrencies. They make it easy for crypto investors and traders to convert their money from fiat to crypto and likewise. They are also touted to lead the charge in the usage of digital currencies in our everyday lives as they are better suited for daily transactions.
Stablecoins are also more secure. For example, every dollar-backed stablecoin in circulation has a 1:1 ratio with the US dollar and can be exchanged for the fiat currency. Unlike cryptocurrencies, stablecoins are more regulated and the amount of coins in circulation are usually audited frequently by an independent accounting firm.
How Many Stablecoins Are there?
There are several stablecoins in the market. The most popular ones according to market cap are USDT, USDC and BUSD with a total market cap of 69, 44, and 22 billion dollars respectively. FTX’s move to create a stablecoin isn’t new among crypto exchanges as Binance launched its dollar-backed BUSD stablecoin in 2019. BUSD has experienced tremendous growth in its three years of existence by becoming the third largest stablecoin according to market cap. It’s no surprise that FTX has decided to make this move considering the success some stablecoin issuers have had in the crypto market.
FTX Has NO Plans To Purchase Robinhood
Sam Bankman-Fried (SBF) and his company have also become known for making many large acquisitions and providing venture capital to various startups in the crypto space. According to him, they have undertaken such projects to help stabilize the crypto market and strengthen FTX’s position in the US. When quizzed about his company purchasing crypto exchange Robinhood, he made it known that there were no plans right now to purchase the company. With that, the rumors can be put to bed.
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