The first regulated stubcoin tied to the international version of Chinese Yuan (CNH) for the foreign exchange market and the global stubcoin race heated up, Korea’s victory (KRW) stubcoin launched this week.
Financial technology company Ancorx debuted the original AXCNH stubcoin on Wednesday at Hong Kong’s Belt and Road Summit on Wednesday after China’s regulatory pivot adopting ridiculous stubcoin in international markets. According to Reuters, financial technology company Ancorxx debuted AXCNH Original Stubcoin on Wednesday at Hong Kong’s Belt and Road Summit.
Stablecoin aims to promote cross-border transactions with the Belt and Road Initiative, an infrastructure project that connects China to the Middle East and Europe and builds physical roads for infrastructure projects that establish maritime trade routes with other regions.
BDACS, a digital asset infrastructure company, announced the launch of Korea’s winning Stablecoin KRW1 on Thursday.
Both KRW1 and AXCHN are radicalized stub coins. That is, 1:1 is fully supported by FIAT currency deposits or government debt certificates held by custodians.
Figure 1 shows how KRW1 Stablecoin is managed. sauce: BDACS
Stabrecoin is currently a geopolitical sector as sovereign governments are rushing to rush Fiat currency to the digital rail to increase demand internationally, in the hopes of offsetting the inflationary effect from currency printing.
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Interactions between stubcoin, fiat currency, inflation and government debt
Legacy financial systems are slow, require robust infrastructure that may not exist in developing regions, and have currency controls for certain jurisdictions that hinder Fiat’s demand.
Place Fiat currency on blockchain rails that operate 24/7 and have cross-border settlements nearby, making Fiat more accessible to the average person, increasing international demand and offsets price increases caused by currency inflation.
US government bonds have surpassed the $37 trillion mark among record government debt around the world. sauce: US debt watch
Currency inflation leads to price increases as currency demand is not proportional to the additional supply created through money prints.
Over-materialized stubcoin issuers such as tethers and circles can help solve this problem by purchasing government debt certificates and cash assets to back up digital fiat tokens and making them accessible to anyone with a mobile phone and crypto wallet.
Essentially, these companies provide a pathway for most individuals around the world to become indirect bond buyers, boost the market for those assets, reduce the yield on state-issued debts, and reduce the burden on government debt services.
Tether is currently one of the largest US Treasury bill holders in the world, beyond developed countries, including Canada, Norway and Germany.
Anton Kobyakov, an adviser to Russian President Vladimir Putin, recently said the US government is trying to offset its $37 trillion debt with stubcoins and gold to boost confidence in the US dollar’s decline.
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