Coinbase, Peter Thiel Back New ‘Reserve’ Stablecoinhttps://cryptoslate.com/coinbase-peter-thiel-back-new-reserve-stablecoin/With the rise in popular interest, the cryptocurrency sector has seen several stablecoins emerge in decentralized and centralized forms. Backed by Coinbase and Peter Thiel, Reserve stablecoin is the latest addition to the digital asset marketplace.
A Next-Gen Stablecoin
Based in San Fransisco, Reserve stablecoin raised $5 million in its seed round from over 40 funds and angel investors, including PayPal founder Peter Thiel, Coinbase Exchange, GSR.IO and Distributed Global.
Unlike Tether and TrueUSD, Reserve uses a fully decentralized, future growth-backed stablecoin model to achieve a 1:1 parity with the US Dollar.
The Reserve protocol will be open source at launch and use a smart contract called Vault to securely store its cryptocurrency collateral.
Using both external digital assets and internal shares to offer stability, Reserve places an emphasis on transparency through decentralization.
In a company blog post, Reserve Co-founder Nevin Freeman said:
“If a future growth-backed stablecoin does reach this state of stable equilibrium, it has the benefit of being totally decentralized and thus censorship resistant.”
Although transparent, the use of a decentralized model and hence external backing by digital assets is inherently difficult to sustain, as the assets backing a stable currency are volatile. Reserve must maintain collateral balances at two to three times the parity value to compensate for future price variation.
In an interview with CCN, Freeman noted:
“There is still a tail-risk that in a black swan event these assets could lose nearly all of their value, and that’s why we aim to create a diversified pool through securitized assets.”
Stablecoins: Gateway to Crypto Mass Adoption
The 20-member team behind the Reserve protocol includes engineers from Google, OpenAI, and former SEC Commissioner Paul Atkins. With current cryptocurrencies being too volatile for use in daily transactions, many believe the introduction of a successful stablecoin will be the beginning of mass adoption.
Freeman wrote in a blog post released June 19:
“I believe stable cryptocurrencies will be the first introduction to crypto for millions or billions of people.”
Several stablecoins are competing to overtake the controversial Tether and become the leading stablecoin for global frictionless value exchange, everyday payments, and more.
Another new pegged currency to add to the list that includes Tether, TrueUSD and many more around the world -
https://www.investmentfrontier.com/2013/02/19/investors-list-countries-with-fixed-currency-exchange-rates/. However, the team behind this is extremely high profile, so I would expect them to make waves for better or worse. It's funny how much of their mantra and pitch sounds like it came from DNotes Global, who is in fact a private company and not an open source cryptocurrency.