Van Eck/SolidX Respond to SEC Regarding Bitcoin ETF Concerns

The SEC has previously voiced their concerns to Van Eck/SolidX with regard to their Bitcoin ETF proposal. The potential ETF issuers have now answered the commission and are awaiting further instruction.

Since last year, Bitcoin and other cryptocurrencies have not only gained traction but have also sought to encourage even more adoption from both average people and institutional investors. The introduction of Bitcoin futures was one way and the potential launch of Bitcoin exchange-traded funds (ETFs) is another. While the former has achieved success since being introduced last year, the latter still has a ways to go.

ETF Access Denied
Denial has been the name of the game for many businesses that have proposed their own Bitcoin ETF, including the Winklevoss twins. The crypto world now waits with bated breath for the U.S. Securities and Exchange Commission’s (SEC) decision on the outcome of the Van Eck/SolidX Bitcoin ETF proposal.
Live Bitcoin News recently reported that the SEC has requested more feedback from Van Eck/SolidX, including the potential offered for market manipulation. According to Benzinga, a private meeting was held between representatives of the two companies, the SEC, and the CBOE on the 9th of October.
In addition to potential manipulation, the commission was also concerned about liquidity, valuation, arbitrage, and custody. Van Eck/SolidX proceeded to answer these concerns by showing how their processes cater to the requirements of the SEC. The commission has subsequently published the Van Eck/SolidX’s answers on the SEC website. The document added that CBOE BZX would be the listing exchange and that the share price will be 25 bitcoins per single share.

While the document outlines the Van Eck/SolidX process and attempts to allay SEC concerns, it might not be enough. SEC Commissioner Kara Stein believes that a high level of accuracy is required as well as easy access to investor funds. She explained:
At the end of the day, whatever fund presents a concept to us will have to show how they can get accurate valuations, how they make sure that there is physical custody, and how to make sure that there is adequate liquidity, especially in a 40 act fund context, where investors can get the money when they need their money.
Van Eck/SolidX Raises Concern
In the published document, Van Eck/SolidX also raised their own concern that the SEC has the potential to continually shift the goalpost. It refers to the commission’s refusal for a 2017 Bitcoin ETF proposal, stating:
The Commission notes that bitcoin is still in the relatively early stages of its development and that, over time, regulated bitcoin-related markets of significant size may develop. Should such markets develop, the Commission could consider whether a bitcoin ETP would, based on the facts and circumstances then presented, be consistent with the requirements of the Exchange Act.
Van Eck/SolidX believes that the term “significantly” is open to interpretation and that the SEC has never given a clear answer on what they constitute as significant. Even so, the document concluded that they will make any changes deemed necessary by the SEC to ensure approval.
Do you believe that the Van Eck/SolidX Bitcoin ETF has a chance of getting approved? Let us know in the comments below!

Images courtesy of Shutterstock.
The post Van Eck/SolidX Respond to SEC Regarding Bitcoin ETF Concerns appeared first on Live Bitcoin News.

How Blockchain is Changing the Nature of Credit Cards

CoinSpeaker
How Blockchain is Changing the Nature of Credit Cards
Bitcoin remains the poster boy for the cryptocurrency market,  while it’s also the most famous application of the ground-breaking blockchain technology. This should not distract from the diverse nature of blockchain, however, which has the potential to disrupt numerous markets and is expected to achieve a cumulative value of $16 billion by 2024.
Blockchain certainly has considerable potential in the wider financial markets, with banks and lenders keen to integrate this technology to drive greater efficiency and transparency across the board.
One example of this exists in the form of PumaPay, which has built a blockchain-based protocol to reform how everyday financial transactions are completed. But how does this work, and what does it mean for consumer credit across the globe.
How PumaPay is Seeking to Reform Consumer Credit
At the heart of this project of two core objectives; namely the reformation of credit transactions in the modern economy and the introduction of cryptocurrencies into the consumer mainstream.
In terms of the former, the company’s product is built on the premise that today’s credit and debit cards are unfit purpose in the prevailing economic climate. This may seem like an unfair assertion, particularly given the recent diversification in this space and the emergence of bad credit products and cards that offer cash back or lucrative sign-on bonuses.
However, the PumaPay system has been developed using open-source technology, which enables merchants and users to pull funds out of a customer’s account with express consent. This would replace the outdated method that sees shoppers push money to a retailer, before the cash flows through a long line of intermediaries as part of a process that can take days to complete.
This would also leverage the secure and transparent nature of blockchain to excellent effect, reforming the payment process withoutplacing customer’s hard-earned money at risk.
What are the Benefits of This and What do They Mean for the Financial Market?
In addition to being quicker and more secure, this type of platform also offers considerable cost-efficiencies to merchants.
More specifically, it creates a scenario in which the number and volume of transaction fees can be reduced dramatically. This reduces the cost of everyday financial transactions for allparties, with customers poised to benefit considerably over a concerted period of time.
This advanced platform is also scalable and extremely flexible, with the introduction of cryptocurrencies creating an additional payment option for customers and merchants across the globe. As a result, customers will be able to execute cryptocurrency payments both on- and offline, creating instantaneous transactions that carry next to no fees.
So what does this mean for current debit and credit cards and the financial sector as a whole? In simple terms, it provides a challenge to the status quo, providing a reform of the typical payment process along with its associated fees and delays.
While neither PumaPay or similar startups yet in a position to consistently challenge market leading names such as Visa or Mastercard, there’s no doubt that the new platform could emerge as the modern standard for completing payments.
The question that remains is whether PumaPay will successfully drive this change or an existing provider will quickly integrate blockchain technology into their core products?
How Blockchain is Changing the Nature of Credit Cards

Dubai Launches State-backed Blockchain Platform – The First in the Middle East

The middle-eastern city of Dubai becomes the first in the region to launch a government-backed blockchain platform.

Dubai’s ‘Smart-City’ Ambitions
The second biggest state of UAE, Dubai, plans to become the first blockchain-powered city in the world. The forward-looking government of Dubai is working on an ambitious project called “Smart Dubai” which aims to leverage new technologies to make the city the happiest in the world.
To leverage blockchain technology towards this goal, a strategy has been put in place under the Dubai Future Foundation.
According to an article published in arabnews.com earlier today, Dubai has partnered with IT giant IBM to launch the government-backed blockchain platform.

How Blockchain Will Help
Under the Smart Dubai initiative, the government wants all its services to become paperless by 2021. Blockchain technology enables instant transactions and can facilitate faster and convenient payment of utility bills and use of government services.
According to the article, IBM will leverage its cloud environment to build services that would store the data locally.
“Dubai has been a pioneer in blockchain technology since its inception, while other major cities around the world were reluctant to embrace it for city-wide implementation,” said Aisha Bin Bishr, Director General of the Smart Dubai Office.
She added:
The Dubai Blockchain Strategy set a clear path for the emirate to have the world’s first fully digitized government by 2021.
Dubai has piloted blockchain technology across various government agencies including roads and transport, energy, health, and education according to Amr Refaat, general manager at IBM Middle East and Pakistan.
He said:
Through the new service, these organizations will have the ability to transition their blockchain developments into full-scale production.
The First Project on the Platform
The first project to be launched on this platform will be “Dubai Pay Blockchain Settlement and Reconciliation System.” The pilot of the system has been conducted by The Dubai Electricity and Water Authority (DEWA) and the Knowledge and Human Development Authority.
Providing details about this launch, Live Bitcoin News had earlier in September reported:
The new system will replace the currently followed practice of manual reconciliation of accounts which apparently takes up to 45 days. Using the upgraded solution will not only bring efficiencies but will also minimise errors.
According to Refaat, IBM has also recently worked with Dubai’s Department of Economic Development (DED) to launch its unified corporate registry.
Talking about the DED implementation, he said:
The aim of the registry is to digitize the process of issuing business licenses and exchanging commerce information for business owners, investors, entrepreneurs, and startups, enabling them to conduct transactions digitally in real-time and in a trusted and secure environment.
Refaat also spoke about the work done with Dubai Airport Free-zone Authority (DAFZA) to digitize the free-zone commercial licensing and renewal process.
He explained:
Through IBM Blockchain, they can manage digital blockchain transactions and accurately and quickly verify documents, enabling businesses to establish operations in the UAE in a time efficient manner.
The government of Dubai is taking the right steps towards its goal of becoming the first blockchain-powered city in the world.
What are your thoughts on this government-backed blockchain platform? Let us know in the comments below.

Images courtesy of ShutterStock
The post Dubai Launches State-backed Blockchain Platform – The First in the Middle East appeared first on Live Bitcoin News.

Crypto Wallet Producer Ledger to Support More Stablecoins , Expands Tether Usability

CoinSpeaker
Crypto Wallet Producer Ledger to Support More Stablecoins , Expands Tether Usability
Stablecoins, or in other words digital assets designed to minimize the price volatility being pegged to some stable assets including fiat currencies or exchange traded commodities, have been gaining popularity over the last years.
Having realized this constantly growing demand for crypto assets with stable values, Ledger, the hardware cryptocurrency wallet maker, has taken a decision to add support for more stablecoins and to expand application of Tether (USDT) across all its products and services.
Moreover, the company has announced expanding its presence to the Asia Pacific region, opening its office in Hong Kong.
Ledger’s Support for Stablecoins
At the current moment, Ledger has added support for Tether to its two handheld storage products: the Ledger Nano and Ledger Blue. However, they it has plans to increase the usability of this U.S. dollar-linked cryptocurrency across all their products and services.
As it has been revealed, Ledger is going to add support for stablecoins to its Ledger Vault service, a multi-authorization cryptocurrency self-custody management solution which provides companies with IT infrastructure to manage their cryptos. As a result, custodians, asset managers and traditional financial services firmswill  have a possibility to store and trade their digital assets.
Some upgrades may be also introduced for the company’s Ledger Nano S, the most popular crypto hardware wallet in the world. The wallet is built off the same infrastructure as the Ledger Vault, supports more than 40 cryptocurrencies and allows users to check their accounts, send and receive cryptocurrency payments with minimized risks.
Activity in the Asia Pacific Region
As we have already mentioned now the company has its presence in Hong Kong.  Benjamin Soong has been named as Head of Asia Pacific (APAC). The region has its specificity. Moreover, the increased company’s interest to stablecoins is partially related to a very positive attitude towards this kind of assets from the side of investors and traders namely in this region.
While due to USDT’s recent loss of parity with the dollar a lot of concerns about the stablecoins reserves have been voiced, its supporters in the Asia Pacific region haven’t lost trust in it. Their demand for it is still very high.
Speaking about the popularity of stablecoins in this region, Soong said:
“One thing that is slightly unique in China and South Korea is the demand for USDT since both of those countries have capital controls, in terms of your ability to move currency out of the country.”
Moreover, Soong also spoke about the company’s further plansfor growth and development:
“We expect to grow quickly, and have already targeted future office expansion, including Tokyo, Seoul and Singapore. I look forward to building a world-class team that will help us accelerate our growth across Asia Pacific.”
Other Projects and Innovations
Ledger is one of the companies that are actively developing in the moment. Let us remind that just recently the firm has entered in a new partnership in the framework of which it will help Blockchain.com to release its first hardware product.
Moreover, it is said that Ledger is actively adding support for the most popular crypto assets. It is expected that such assets as Cardano (ADA), Decred (DCR), IOTA, Lisk (LSK), RavenCoin (RVN), and Tezos (XTZ) will become available quite soon.
Crypto Wallet Producer Ledger to Support More Stablecoins , Expands Tether Usability

JP Morgan’s Quorum Blockchain to be Used to ‘Tokenize’ Gold Bars

CoinSpeaker
JP Morgan’s Quorum Blockchain to be Used to ‘Tokenize’ Gold Bars
As it has been recently revealed, Quorum that is a blockchain developed by US banking giant JPMorgan Chase Bank will be utilized for “tokenization” of gold bars.
Earlier, CoinSpeaker has already reported that Quorum is a private blockchain-based transactions platform based on the code behind the Ethereum network. The platform was designed with an aim to provide an opportunity to use a publicly available system for confidential transactions.
Capacities of Quorum
Now this Ethereum based blockchain will enable miners to earn a premium on the global market which can be considered to be a sign of the beginning of a new era for traders who use the cutting edge technologies to find new opportunities to get profits.
When blockchain only started gaining momentum several years ago, it was applied mainly in the financial sector in the sphere of creating digital currencies. Nevertheless, now its application is not limited to only one sector, the distributed ledger technology is widely used in such areas as healthcare, education, banking and others.
Quorum, JP Morgan’s enterprise version of the Ethereum blockchain, ensures operation of smart contracts or automatization of processes in accordance with a set of rules. Quorum makes JP Morgan a really unique financial institution.
“We are the only financial player that owns the entire stack, from the application to the protocol,” stated Umar Farooq, JPMorgan Chase’s head of blockchain initiatives, commenting the development of Quarum.
The Quorum blockchain was created in the framework of JPMorgan’s partnership with Ethereum Alliance and its excellent performance together with a high level of privacy provided has managed to win attention of a great number of financial services users.
Tokenization of Precious Metal
Now, the organization seeks to tokenize assets with the use of blockchain technology. Blockchain technology will allow to digitize them with a view to transfer them to distributed ledgers. The idea was announced during the Sibos conference organized in Sydney last week.
According to Umar Farooq, the main aim of tokenizing gold was to encode and track bars at each stage of the supply chain to ensure transparency and purity.
Explaining this initiative, Farooq said:
 “They wrap a gold bar into a tamper-proof case electronically tagged, and they can track the gold bar from the mine to endpoint. The use case being, if you know it’s a socially responsible mine, someone will be willing to pay a higher spread on that gold versus if you don’t know where it comes from.”
Tokenization of gold bars will enable direct trade between entities without any necessity to involve a third party such as a broker or an exchange.
Other Cases of Quorum Application
According to Farooq, tokenization of gold bars is not the only way to use Quorum. He also said that there are ideas to utilize this blockchain platform for the needs of secondary and capital markets as well.
JP Morgan’s Quorum Blockchain to be Used to ‘Tokenize’ Gold Bars

Impact of Psychology on Use of Cryptocurrencies

The use of cryptocurrencies has been very low. Let’s look at the psychology behind the lack of adoption.

Benefits of Using Cryptocurrencies
There is no denying the fact that blockchain technology is disruptive in the way it facilitates an instant and cheap transfer of money. However, the level of adoption remains abysmally low.
An article published earlier on Monday in psychologytoday.com explored the psychology behind what drives consumer behavior.
The primary use-case for which Bitcoin was invented was “Transfer of Value”. Using cryptocurrencies for payments can be beneficial for consumers and merchants alike. Some tangible benefits that could be derived include:

Lower transactional costs compared to other instruments like credit cards or cash. By accepting crypto-payments, merchants can save upwards of 2% and pass on some of these benefits to consumers.
Removes intermediaries and reduces the risks of frauds and identity thefts.
The transactions are secure and private. The only drawback here being that the anonymity can be misused for illegal activities like money laundering.
Using cryptocurrencies for payments would mean that one could travel anywhere around the world without the need to change one fiat currency for another.

Why Is the Adoption Low?
Despite the massive potential, adoption has been not only low but slow as well. The exponential rise in the price of Bitcoin towards the end of 2017 was mostly driven by speculation of retail investors and not real-world use.
The article reports that:
A 2016 study found that less than 1 % of Americans owned or used any cryptocurrency. More recent estimates put the number of adopters at 5-8 %. However, almost all of these individuals are trading cryptocurrency, not using it as money.
Here are the reasons that contribute to the low level of adoption:

The lack of standards. Currently, there are too many competing cryptocurrencies out there. And new ones are being created every day. “Consumer psychology research shows that when a market lacks one standard, consumers are slow to adopt the innovation because of the uncertainty,” explains the article.

High volatility has been another deterrent. In the last one year, the value of Bitcoin has oscillated between $5,857 and $18,343. 10-15% swings in a day are considered normal for a cryptocurrency, making them unfit for payments.

The third reason is the small number of merchants that accept payments in cryptocurrencies. Merchants will not adopt new technology till there are enough consumers who are willing to pay with digital assets.

For customers, there is no pressing need to change as they are comfortable with current methods like credit cards, or fiat-based e-wallets like PayPal.
Is Anyone Using Cryptocurrencies?
There are a few niche sectors where the use of cryptocurrencies has picked up, according to the article. Sports gambling was introduced at the FIFA World Cup tournament earlier this year, It has since expanded to NFL football.
Digital currencies have also been used in real estate transaction in Florida and California. Art is one more area where consumers can buy artwork with cryptocurrencies.
Recently Live Bitcoin News reported about cryptocurrencies being accepted by an auto dealer in New England and a restaurant in New Jersey.
While encouraging stories of adoption pour in from across the globe, the number is still far from desirable.
Do you agree with the arguments presented above? Let us know in the comments below.

Images courtesy of ShutterStock
The post Impact of Psychology on Use of Cryptocurrencies appeared first on Live Bitcoin News.

Coinbase Valuations Hit Over $8 Billion After the Latest Series E Funding Round

CoinSpeaker
Coinbase Valuations Hit Over $8 Billion After the Latest Series E Funding Round
On Tuesday, October 30, Coinbase President and COO Asiff Hirji announced that the company has raised an additional $300 million during the Series E funding round. As a result, the Coinbase valuation has now climbed over $8 billion which will help the company to accelerate faster adoption of digital assets.
The $300 million Series E equity funding round was led by Tiger Global Management. Other contributing participants are some popular names like Wellington Management, Y Combinator Continuity, Andreessen Horowitz, Polychain and other.
Coinbase said that these funds will be used for developing infrastructure for crypto-related services and products. Coinbase also plans to use these funds towards the company’s global expansion plans. In the blog post, Mr. Hirji also talked about expanding Coinbase’s suite of crypto offerings. Hirji said: “We see hundreds of cryptocurrencies that could be added to our platform today and we will lay the groundwork to support thousands in the future”.
In the blog post, Hirji said that the funds shall be used for other “utility applications” for cryptocurrencies while referring to the addition of new products like “stablecoins”. Last week itself, Coinbase announced the addition of Circle’s USD Coin (USDC). The USDC is an ERC20 token based on the Ethereum blockchain. Circle’s USD Coin is tied to the U.S. Dollar in 1:1 ratio. Coinbase talked about the reason to support USD Coin and the merits that stablecoins bring to the system.
“The advantage of a blockchain-based digital dollar like USDC is easier to program with, to send quickly, to use in dApps, and to store locally than traditional bank account-based dollars. That’s why we think of it as an important step towards a more open financial system.”
Due to the heavy meltdown of the crypto market this year, Coinbase has been faced with dry volumes. This has forced the company to venture into new products and service creating alternate revenue streams. Apart from retail investors, the company is also focusing on products for institutional investors.
The company’s wholly-owned subsidiary Coinbase Custody recently secured a license from the NYDFS to provide custodial solutions for top six cryptocurrencies. A safe and secure custodial solution will provide an entry point for institutional investors in the crypto space.
Another revenue which Coinbase is currently exploring is listing of security tokens tied to conventional assets like real estate or private shares. The security tokens market which is still in the pre-mature stage has now started getting attention from global investors and companies.
It shows that Coinbase is consistent in its efforts to explore new possibilities in the crypto space. In a concluding note, Hirji said:
“Coinbase is, and will remain, a crypto-first company. More than anything, we’re proud of the millions of people that have turned to Coinbase as their entry-point into crypto. We take that responsibility very seriously. We strive to be the easy, trusted way for anyone to get started with cryptocurrencies. We see Coinbase’s growth as validation that the ecosystem will only continue to grow in size, influence and impact — ultimately ushering in a more open financial system for the world.”
Coinbase Valuations Hit Over $8 Billion After the Latest Series E Funding Round

Goldman Sachs Signs Up a Limited Number of Clients for Its Upcoming Bitcoin Trading Product

CoinSpeaker
Goldman Sachs Signs Up a Limited Number of Clients for Its Upcoming Bitcoin Trading Product
Goldman Sachs, global investment bank, has been on the news in a pretty negative light lately. Many investors were waiting for the company to make a big splash into the market, however, Goldman Sachs did not live up their expectations, postponing the plans to build a cryptocurrency desk. After such an announcement, there were rumors that the company dropped the intention of creating crypto trading desk, but they fortunately turned out to be fake.
Currently, it looks like Goldman Sachs (GS) is onboarding clients to adopt its new Bitcoin derivative product. As The Block reported, Goldman Sachs is introducing a small number of institutional investors to its bitcoin non-deliverable forward contracts, but it is not hurrying up to roll out new tradable products.
The report reads:
“The source said customers would call senior bankers and traders for direction on where the space is going and to learn how they can break into the market.”
It is notable that the report contradicts an earlier publication by Abacus Journal, according to which Goldman Sachs was “actively exploring the creation” of a non-deliverable forward for ether, the native asset of the Ethereum platform.  Such a step would enhance approval for Ethereum and altcoins in general.
However, sources close to the Block claim that this is not true, as the bank is not pursuing the creation of an ether derivative. Furthermore, they reveal that the clients aren’t necessarily looking for new products, but that doesn’t mean that they are not interested in the market.
Currently, Bitcoin derivatives are available for trading on several regulated US trading platforms, among them are exchanges like CME and Chicago Based Options Exchange (CBOE). Both of them offer cash-settled bitcoin futures contracts and promise to expand their crypto offerings in the future.
Latest on Goldman Sachs
Goldman Sachs is a leading global investment banking, securities and investment management firm that offers a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and individuals. Founded in 1869, the firm is headquartered in New York and has offices in all major financial centers around the world.
Goldman Sachs is very active with its venture investments. Together with Google Ventures, Kleiner Perkins and Silicon Valley Bank, the company made a $25 million investment in Veem, a blockchain-powered payment service for small businesses. Recently, the bank led the $57.5 million Series B financing round of BitGo, a company which develops secure wallets for crypto custody.
In May of this year, Goldman Sachs announced its crypto trading desk, promising to offer bitcoin non-deliverable forward contracts.  But whether Goldman Sachs could develop such a product is not yet clear, since such futures do not trade on any regulated exchange in the U.S.
Goldman Sachs Signs Up a Limited Number of Clients for Its Upcoming Bitcoin Trading Product

Next 10 Years Could See Bitcoin Accepted as the Norm, Says eToro’s Iqbal Gandham

Tomorrow mark’s a very important day for Bitcoin. Tomorrow is its 10th birthday, marking the day when Satoshi Nakamoto released its whitepaper.

Still Going Strong After 10 Years
Compared to the end of 2017, 2018 has proven to be a tough year for the market. Bitcoin, which was trading around $20,000 mid-December, is now valued at $6,330, according to CoinMarketCap.
Yet, while it has remained within the $6,200 and $6,800 range for several months, this isn’t necessarily a bad thing. For many, it’s a sign that market speculation is on the decline, leaving behind a market that is less volatile. And it’s because of movements such as this that people in the industry think its price will eventually rise.
Iqbal Gandham, eToro U.K.’s managing director, said the next 10 years will prove positive for Bitcoin, reports the Independent.
He said:
Its price, although volatile at times, will fall in line with other assets as its utility increases and speculation reduces. […] The next decade could see Bitcoin being accepted as the norm when it comes to money transfer and payments. As with any startup idea, early days are always risky, but I feel these are now few and far between.
Nigel Green, founder and CEO the deVere Group, an international financial consultancy firm, is also confident as to where the combined crypto market is heading. In the next 10 years, Green believes that it will increase by 5,000 percent.
Notably, though, he is of the opinion that Bitcoin’s influence will decline in the same time frame. He thinks that mass adoption of the crypto market and the introduction of other cryptoassets will push Bitcoin from the number one spot.

Is This Likely to Happen?
Whether it happens remains to be seen. For now, though, it doesn’t appear likely. Not only that, but efforts are already being made to boost scalability of the Bitcoin blockchain.
Various projects with the Lightning Network are showing that the technology has the potential to increase Bitcoin’s transactions per second (TPS) from around seven to billions.
By working on scaling solutions now it’s bettering its chance of remaining number one further down the line. Not only that, but with the aid of off-chain transactions, Bitcoin’s adoption will be easier and more widely felt. It’s definitely been an interesting 10 years of the currency’s existence; it’s likely that the next 10 will just be as exciting as well.
What do you think the next 10 years will hold for Bitcoin? Let us know in the comments below.

Images courtesy of ShutterStock
The post Next 10 Years Could See Bitcoin Accepted as the Norm, Says eToro’s Iqbal Gandham appeared first on Live Bitcoin News.

Nexo Entices Non-USDT Stablecoin Holders to Provide Loan Liquidity

The cryptocurrency world has seen an influx of stablecoins. While their initial purpose is to provide a stable asset value, Nexo sees merit in this concept for different reasons. The crypto-oriented loan platform will offer hefty interest rates to users storing major stablecoins on this platform.

Nexo has Unusual Plans
The purpose of a stablecoin is to create digitized versions of existing assets. In this case, they usually represent 1 US Dollar in digital form. These digital currencies can be traded freely across many exchanges supporting Bitcoin and altcoins. However, it appears they will also provide an interest-bearing alternative to traditional bank accounts.
Nexo, the loan platform focusing on cryptocurrencies, sees merit in these new assets. Holders of such coins can earn interest rates of up to 6.5%. Those rates are high, especially for currencies which do not fluctuate in value. This is a rather surprising development for a company trying to position itself in the world of cryptocurrency lending.
The company confirms they are looking for owners of the “major” stablecoins. That list includes TUSD, USDC, GUSD, PAX, and DAI. One notably absent currency is Tether’s USDT. That asset has not been able to maintain a $1 valuation for nearly two weeks now. All other stablecoins have no problems in this department, which makes them of greater interest to Nexo.

Crypto Lending Slowly Becomes Successful
Volatile currencies such as Bitcoin lend themselves perfectly to lending service providers. The fluctuating value of this asset seems to attract a lot of attention. Nexo also supports Ethereum, Binance Coin, NEXO, and XRP as collateral options. The addition of these major stablecoins brings the total to 10 different supported assets.
These new rates put an interesting spin on crypto lending as a whole. Extending such a loan carries certain risks. The recipient of a loan can back out of the deal and never refund the lender. That has been a problem for platforms such as BTCJam in the past few years. How Nexo will address such potential situations, remains to be determined.
Using a stablecoin for loans seems counterproductive. It is virtually the same as obtaining a cash loan, but in digital format. This new decision may improve the overall liquidity of all supported stablecoins accordingly. None of them comes close to rivaling Tether’s USDT in terms of supply and market cap. This high interest offered by Nexo may help change that situation over the coming months.
Why do you think Nexo is offering such high interest gains for stablecoin holders? Let us know in the comments.

Images courtesy of ShutterStock
The post Nexo Entices Non-USDT Stablecoin Holders to Provide Loan Liquidity appeared first on Live Bitcoin News.