What Can Be Done to Solve the Stablecoin Dilemma?

By Claude Eguienta is the Chief Executive Officer at Mimo

Stablecoins are among the most revolutionary crypto assets ever created. The idea behind them is quite simple – traditional cryptocurrencies like Bitcoin (BTC) and Ether (ETH) can be volatile. This makes it risky to use them as a store of value or medium of exchange. So, in order to eliminate this risk, the inherent volatility needs to be taken away.

This risk is removed by pegging the value of a digital currency to a specific asset. Tether’s USDT, which is now the most popular stablecoin, was one of the first digital assets to do this successfully. Ideally, the value of each token is pegged to something with a stable price (e.g. the US dollar), lending it the stability needed to become a good store of value and medium of exchange.

Tether accomplished its aim quite well. However, there were a few issues, most notably the lack of transparency around Tether’s reserves. This was one…