GMO Internet To Release Yen-Pegged Stablecoin in 2019
Japanese conglomerate GMO Internet announced it will be releasing a new yen-pegged stablecoin in 2019. Its offering will join a wave of new stablecoins that are looking to challenge long-time player Tether.
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GMO’s Stablecoin Will be Pegged to the Yen
The GMO Japanese Yen (GJY) will be a cryptocurrency stablecoin pegged to the yen, per a statement issued by GMO Internet on October 9th. It will be available in some Asian countries by 2019. The firm hopes that GJY will be adopted by traders as a bridge between cryptocurrencies, which have notoriously unstable values, and Japan’s official currency, the yen.
GMO Internet is also looking to target the international remittances market with the stablecoin, which will be backed by reserves of yen stored in banks in Japan in order to assure creditworthiness, according to the firm.
Not GMO Internet’s First Crypto Product
Tokyo-based GMO Internet provides internet infrastructure, online advertising, and finance services. It has been involved in cryptocurrencies since May of 2017, when it opened a cryptocurrency exchange in Japan, GMO Coin. The firm expanded its presence into the United Kingdom in May of this year, when it partnered up with Finatext UK to develop a mobile app, Pipster, that allows foreign exchange and crypto trading.
Since then, GMO Internet has moved into other areas of cryptocurrencies, announcing in September of 2017 that it would be developing Bitcoin mining hardware and creating a cloud mining business based in Northern Europe. The Switzerland-based cloud mining operation is now accepting customers that are able to make an initial investment of $5.5 million USD.
GMO Internet also attracted attention back in December of 2017, near the height of the cryptocurrency valuation bubble, when it said it would be paying some of its employees’ salaries in Bitcoin.
A Smörgåsbord of New Stablecoins On the Way
Announcements of new stablecoins have become frequent in recent months, as firms look to find ways to make cryptocurrency trading easier and find a replacement for the most widely traded stablecoin, Tether. In September, the Winklevoss twins-backed Gemini Trust Company secured approval of its Gemini Dollar from New York State financial regulators. The dollar-pegged stablecoin will run on Ethereum.
That came just a few weeks after Binance and three partners launched a US-dollar pegged stablecoin called Terra, which is backed by $32 million in funding. The team behind Terra is partnering with e-commerce sites, hoping to spur adoption by offering lower fees for online retailers and discounts and rewards for users.
Goldman Sachs-backed Circle also announced a US-dollar pegged stablecoin called USD Coin. Though it has no firm release date, the company says the coin should be available in the coming months.
Tether Under Pressure from New Competitors
Tether, though one of the most widely traded stablecoins, has long faced accusations of being manipulated and lacking transparency. It recently attracted attention when unconfirmed rumors spread that its partner bank, Puerto Rico-based Noble Bank International, was facing insolvency.
While Tether enjoyed a dominant market position for many years, new offerings from GMO Internet and others are challenging its position. It remains to be seen, however, if these new contenders will face the same issues that have dogged Tether.
And there are some commentators, like University of California Economist Barry Eichengreen, who argue that stablecoins have inherent flaws which could lead to the collapse of the fiat pegs they are designed to hold. With all the new stablecoins coming onto the market, the answer to that question should be settled in the coming years.
What do you think? Will new stablecoins coming to market be able to unseat Tether?
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