by : integritytoken Stablecoins

Is the end of privacy coins so close?

Now other cryptocurrencies that are likely to be volatile in the coming months are privacy coins.

That’s because it looks like major exchanges are slowly starting to delist them due to regulatory pressure with Hobie being the latest exchange to comply.

The people in power aren’t fans of privacy go figure.

Now you might be thinking that this is nothing new given that privacy coins have been delisted by cryptocurrency exchanges in the past for the same reason.

The difference is that all those exchanges were in heavily regulated jurisdictions such as Japan and South Korea.

Huobi’s delisting of Dash, decred pharaoh, monero, verge, zcash and horizon is significant because Huobi was what is commonly referred to as an offshore.

Cryptocurrency exchange Huobi is based in Seychelles which is not nearly as strict as other places to put it lightly.

As such Hobie’s privacy coin de-listing could be a sign of more to come from other offshore exchanges.

The next in line to comply could be Kucoin given that it’s also based in Seychelles.

Note that this is just my speculation but it’s something to be aware of if you’re a fan of financial privacy.

Now luckily for Monero and most other privacy coins Huobi only accounted for a portion of their trading volume though a kucoin delisting would deal a bigger blow it’s one that most of these coins could probably survive.

However a Binance delisting is something that most privacy coins would probably not survive.

While Binance was able to justify listing these coins in the days when it didn’t have a global headquarters it’s going to be increasingly harder to justify going forward.

That’s because Binance CEO Changpeng Zhao has been actively trying to secure numerous exchange licenses and office locations around the world.

There is a strong chance that these global regulators could point to privacy coins as an area of concern.

If this were the case then Binance would be in a bit of a pickle about what to do.

Now I’ll repeat that this is just my speculation but I find it hard to see how the cookie could crumble any other way with central bank digital currencies being rolled out across the world.

Governments want to make sure that their citizens do not have access to any alternatives.

BTC isn’t that big of a threat because every transaction can be easily tracked due to Bitcoin’s transparent blockchain.

This means that regulatory pressure can be easily applied when someone breaks ranks even if the transactions themselves can’t be stopped.

By contrast privacy coins particularly Monero’s XMR are next to impossible to trace.

Yes, this makes them prone to adoption by criminals for all sorts of illicit activity but it also makes privacy coins the only way to protect your financial freedom specifically your ability to purchase things without scrutiny.

Now as I’ve mentioned before financial privacy may not be all that important today but it could be very important tomorrow.

It will be of paramount importance once CDBC’s are rolled out that’s for sure.

It could quite literally be the difference between life and death in some contexts

by : integritytoken Stablecoins

Stablecoins

Stablecoins are cryptocurrencies whose value is stabilized, or linked, to that of another currency, commodity, or financial instrument. Stablecoins are meant to provide an alternative to the high volatility of most popular cryptocurrencies like Bitcoin (BTC), which has made such investments less practical for daily transactions.

Bitcoin is the most popular cryptocurrency, but it can be very volatile. For example, in March 2020 its price was barely above $4,000 and by April 2021 had risen to nearly $65,000 only to fall again by 50% over the next two months. Swings within a day can also be large; it often moves more than 10% in just a few hours.

For investors holding cryptocurrencies for extended periods of time, the continuous volatility makes routine purchases a risky speculation. They don’t want to become renowned for exchanging 10,000 Bitcoins for two pizzas. Most sellers also don’t want to face a loss if the cryptocurrency’s value decreases abruptly after they’ve been paid in it.

As a currency that isn’t lawful tender, a cryptocurrency must maintain a stable value in order to reassure those who accept it that it will retain purchasing power. Daily forex trading movements of 1% are uncommon among traditional fiat currencies.

Stablecoins, as the name suggests, attempt to address this issue by promising to keep the value of cryptocurrency consistent.

Some might claim that stablecoins are a cure in search of a disease because the US dollar is so readily available and accepted. nMany cryptocurrency enthusiasts, on the other hand, believe that digital currency controlled by central banks will be the future. Stablecoins are divided into three categories based on the method used to keep their value stable.

Fiat-collateralized stablecoins are backed by assets such as the U.S. dollar, gold, or silver to maintain its value and avoid volatility.

Common stablecoins like Tether (USDT) and TrueUSD (TUSD) are denominated at parity to the U.S. dollar, meaning their value is always equal to $1 USD. These currencies are backed by currency reserves that are regularly audited by independent custodians.

Crypto-collateralized stablecoins are backed by other cryptocurrencies. Because the reserve cryptocurrency may also be volatile, such stablecoins are over-collateralized—the value of cryptocurrency held in reserves exceeds the value of the stablecoins issued.

If the value of a cryptocurrency falls by 50%, there is still $2 million worth of that currency held in reserve to support $1 million in stablecoins. For example, MakerDAO’s Dai (DAI) is exchangeable for U.S. dollars but also backed 150% by Ethereum (ETH) and other cryptocurrencies.

Stablecoins that use an algorithmic approach to keep the value stable may or may not maintain reserves. Their main distinction is the method used to keep the value of a stablecoin steady by restricting supply via a computer program, which is essentially a set of instructions.

Unlike central banks, which use a reserve asset to keep the value of their issued currency stable, we don’t rely on that. The difference is that acentral bank like the Federal Reserve sets monetary policy publicly and its credible status as the issuer of legal tender does wonders for our policy’s reputation.

Algorithmic stablecoins have no advantage in a crisis. For example, on May 11, 2022, the price of TerraUSD (UST) crashed more than 60%. This caused it to lose its peg to the U.S dollar as the price of Luna- the token used to peg Terra- slumped by more than 80%.

Stablecoins have come under increasing regulatory scrutiny, given the rapid expansion of the $130 billion market and the potential it has to influence the global financial system.

In October 2021, the International Organization of Securities Commissions (IOSCO) urged regulators to treat stablecoins as financial market infrastructure alongside payment systems and clearinghouses. The plan focuses on stablecoins that have been recognized by authorities as being systemically significant, with the potential to disrupt payments and settlements.

Moreover, politicians have been increasingly vocal about the need for tighter regulation of stablecoins. For instance, in September 2021, Senator Cynthia Lummis (R-Wyoming) called for regular audits ofstablecoin issuers, while others support bank-like regulations for the sector.