The technological developments brought about by the invention of blockchain, Bitcoin and cryptocurrency are rapidly changing the financial landscape, because emerging industries have failed to adapt to any conventional classification and become their own asset class.
Stablecoin is the solution
Although the digital currency industry is chaotic as it moves toward the mainstream, it is plagued by wild market fluctuations, fraud, theft, and criminal activities. Despite this, the industry is still proving its resilience, but in today’s unprecedented economic era, it has demonstrated new possibilities and technological opportunities. The rapid growth of Internet users has promoted efforts to continuously expand the industry. A series of blockades coupled with imposed containment policies have caused affected countries to formulate COVID-19 guidelines, which has accelerated the pace of users turning to the Internet for social connections, conducting financial businesses and seeking economic capabilities.
Their continuous online exposure stimulated their awareness and eventually participated in the work of the entire cryptocurrency ecosystem. Since it is a major factor, this has become a preferred point of choice relative to fiat currencies; providing users with information on their financial personality control. The cryptocurrency ecosystem not only attracted the attention of financial operators, but also led to the creation of a new promising digital currency stable currency.
Just as the turbulent nature of digital currencies is about to drive potential users, traders and investors to withdraw, stablecoins were created to solve many of the problems surrounding novel asset classes. First of all, stablecoins are still decentralized in nature, and can operate normally without any third parties and supported by blockchain and distributed ledger technology. The second stablecoin greatly reduces the volatility of cryptocurrencies by pegging it to legal reserves such as the U.S. dollar, euro or a basket of assets. Finally, they allow users to control the ownership of personal wealth, funds and assets anytime, anywhere. This concept, driven by the understanding of the outdated financial system and the weak knowledge of the euro’s survival, led to the creation of EURST by Simone Mazzuca, which was published in last week’s article “EURST Stablecoin – The reshaping of the European economy” was introduced.
However, as with any emerging technology, the ambiguity comes from stablecoins. This is the hottest topic of discussion caused by a recent bill proposed by the United States. The draft proposes that stablecoin operations will not be approved and approved by the Federal Reserve and FDIC insurance. Is considered illegal. The bill will also require stablecoin issuers to obtain a bank charter, which means that stablecoins become a deposit. The main authors of the draft law, representatives of the Democratic Party, Rashida Tlaib, Jesus Garcia and Stephen Lynch believe that the STABLEact is designed to “protect consumers Risks posed by emerging payment tools (such as Facebook’s Libra and other stable coins). Enter the market by regulating their issuance and related business activities.”
On another platform, Cristine Lagarde, President of the European Central Bank, shared her views and was troubled by the fact that stablecoins “may threaten financial stability and monetary sovereignty”, referring to global technology Stable currency supported by the company.
“The debate over stablecoins is actually a problem that stablecoins are solving.”
-Simone Mazzuca (Simone Mazzuca)
EURST completes work
As far as EURST is concerned, it is a real-time vetted stablecoin backed by 1 Euro USD and secured by the Federal Reserve and Wallex Trust (the custodian of EURST, which uses DLT in its blockchain infrastructure). Users can rest assured that the reserve can be converted at any time as needed.
Mr. Mazzuca has worked on the EURST project for more than a year to ensure that EURST can complete its work, especially in terms of protecting client assets. This is done through the adoption of Article 5 of the “Anti-Money Laundering Directive” and the “Know Your Customer” procedure, which does not describe anything that the author of STABLEActs and the European Central Bank should worry about. Clients with scarce funds and underserved services will benefit the most from EURST, because it actually eliminates the high fees and snail pace that clients usually encounter in the current financial system.
“The bill is currently causing devastating confusion over the true nature of digital currencies” -Simone Mazzuca (Simone Mazzuca)
Bitcoin was created to release an inflationary currency that stablecoins seek to resolve. Now, the technology behind stablecoins has provided many solutions, such as double spending problems, smart contract problems, and fast processing. When the peg of a stable currency is a guarantee that assets are secured, this concern may be unfounded. One might argue that if all stablecoins can be regarded as alternative currencies, they should be pegged to the U.S. dollar. This will create an overall and unified front for the development of stablecoins and eliminate any potential political or economic impact. Suppose the purpose of STABLEAct is to regulate Facebook’s Libra through its fantastically harsh range. In that case, the draft law may actually harm those draft laws that are already providing effective niche solutions for the existing financial system.
If the stablecoin issuer cannot obtain the operating structure and license of EURST, STABLEAct may weaken technological progress and blockchain development, causing more harm than good.
Therefore, Mr. Mazuka believes that the protection we need is continuous technological progress and advancement in order to finally eliminate the thing that has plagued our people for a long time, that is, security and equality in the financial system.
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