As cryptocurrencies prices plunge further, developers in the sector are turning their attention to digital assets that are less volatile- stable coins. The notorious Chinese crypto investor and billionare Li Xiaolai is commandeering a stablecoin project in Hong Kong. The stablecoin project is under Hong kong’s Grandshores’ Stock Exchange in which Mr. Li was recently appointed executive Director and co-CEO.
Under his newly appointed post, Li is expected to lead multiple projects including launching of the company’s first stable coin, “establishment of a Directed Acyclic Graph (DAG)-based public database, development of Trusted Execution Environment (TEE) technologies, and other blockchain-related projects.”
Li who is an ardent crypto crusader believes that stablecoins will solve the problem of cryptos’ high volatility as the digital assets are backed by relatively stable fiat currencies. Pegging stablecoins with fiat currency will demand that the developer reserves the same value of the particular fiat currency underpinning the stablecoin.
The infamous tether
This has been a concern among already existing stablecoins like Tether whose fiat currency reserves have been questioned in many instances puncturing its reputation severely leading to a significant drop of its 1-1 USD peg to $0.95 according to recent data.
Grandshores Technology blockchain innovation fund which will invest in the stablecoin project hopes to push the stablecoin to global realms upon its launch and ensure that it becomes a household digital currency.
Unlike tether which is pegged to the U.S Dollar, Grandshore is planning to launch 3 stablecoins pegged to 3 different fiat currencies. The company’s first stablecoin will be backed by the Japanese Yen while the second and third will be pegged to the Hong Kong and Australian Dollar respectively.
To show its commitment towards stablecoins, Grandshores Technology will fund the stablecoin project using the USD backed Tether (USDT). The first yen stablecoin is slated for launch in Q1 2019. Although Tether has failed to influence investor interest, the stablecoin has managed to maintain a stable value unlike other cryptocurrencies that have severely suffered the recent price crash. It is becoming evident that the recent crush has been a blessing in disguise to developers with interest in stable coins.