Bit Trade Partners with Emparta to Launch Australia’s First Dollar-backed Stablecoin
Bit Trade, an Australian cryptocurrency exchange has recently partnered with Emparta, a blockchain employment platform to build and launch a cryptocurrency backed by the Australia dollar. According to Bit Trade’s blog post, published on September 21, 2018, the Australian stablecoin is scheduled to launch in 2019.
Stablecoin the Backbone of Blockchain Finance
Unlike popular cryptocurrencies like Bitcoin or Ether, stable coins are cryptocurrencies that are pegged to a reserve asset like the US or Australian dollar, which gives it price stability relative to the underlying asset. Business Insider noted that those in support of stable coins often say that stable coins provide the benefits of a cryptocurrency like faster transactions speeds and greater transparency without its extreme volatility.
“Market volatility in the digital currency space makes a stable coin a very attractive refuge for investors seeking stable returns, and marks a new way to access digital currencies in Australia, said Jonathon Miller, the managing director of Bit Trade.
Bit Trade noted that there are many use-cases for stablecoins including its use for wages and rents or any other form of recurring payment, remittance, as a store of value for longer-term hedging, its applications in commerce and payment, in lending and prediction markets for long-term issuances, and in trading and wealth management.
Local Australian Stable Coin will be Fully Redeemable on Demand
While stable coins have a lot of benefits and use cases, the most well known and controversial stable coin is Tether. The Tether token is said to be pegged to the US dollar. According to Coinmarketcap, Tether is the 8th most popular cryptocurrency, with a market capitalization of $2.8 billion.
Although Tether is supposed to have reserves of US dollars to back its currency, many in the cryptocurrency community are skeptical and doubtful of their claims.
James Hill, the chief operating officer of Emparta, mentioned to Business Insider that the local Australian Stable coin is different from Tether because these tokens can be fully redeemed on demand.
“An employer will pay wages in traditional fiat into a nominated treasury account, which receives the money and mints the stable coin. When the person receiving the payment wants to redeem the funds, the coin is ‘burnt,’ and money is sent back in Australian dollars.” Emparta is currently developing a prototype which is approximately five weeks from completion.