eToro, a social trading and multi-asset brokerage company, recently announced the launch of eight new stablecoins and a new cryptocurrency exchange, eToroX. The new stablecoins would be pegged with the valuation of major fiat currencies.
Cryptocurrencies often face a lot of criticism from various groups of users because of their extreme volatility. The creation of stablecoins was motivated by the need to lend more stability to the price of tokens.
Lately, the emergence of new stablecoins has become a trend. JP Morgan Chase announced the launch of JPM Coin while Stasis launched a Euro-backed stablecoin last July. The trend did not stop there as a new stablecoin [Neutral Dollar], backed by other stablecoins also entered the market.
Most parties behind the creation and launch of these new stablecoins have been very vocal of their utilities. Yoni Assia, the CEO of eToro, is one of them and believes that eToro’s stablecoin will play a significant role in the market by bringing in much-required liquidity.
“Some exchanges have thin order books into fiat, although assets like Tether [USDT] are widely tradeable, they still suffer from high volatility because markets can’t provide sufficient liquidity. By issuing our own stablecoin we are therefore increasing liquidity.”
An influx of greater liquidity would reduce the overall volatility of the market. However, the entry of stablecoins alone isn’t a guarantee as stablecoins themselves have slipped in value in the past. Tether, the world’s largest stablecoin, dropped to $0.82 in October 2018.
Speaking to Crypto Briefing, Assia also dismissed concerns about high liquidity being linked to the greater adoption of eToro’s stablecoin among users. Assia remained confident and assured that this will not be an issue.
“eToro is very ROI [return on investment] orientated. We spend money where we can to promote the space and increase our brand awareness. Marketing generates interest in our products and attracts potential customers.”
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