Stronghold USD (UDS) demonstrates Stablecoins are unstable

Stronghold USD (UDS) demonstrates Stablecoins are unstable

The Stronghold USD (USDS) US Dollar-pegged stablecoin has a high-level backer in the form of IBM (NYSE: IBM).

In detail, Stronghold USD is yet another Ethereum request for Comment (ERC20) stablecoin. Hence, Stronghold you can theoretically USDS into other Ethereum tokens.

However, Coin Frenzy claims IBM is testing the use of Stronghold USD in its blockchain experiments. Stronghold is a blockchain platform that allows for the tokenization of assets.

In addition, Stronghold claims it can provide an instant settlement of cross-border payments in US Dollars via a “lightning-fast network.” Hence, Stronghold could have a lot of value if these claims are true.

In fact, cross-border payments will be a $22.23 trillion-dollar business in 2019, Statista forecasts. Plus, the value of cross-border payments could grow to $26.64 trillion-dollars by 2023. Moreover, Statista calculates retail cross-border payments are a $2.58 trillion-dollar market that will grow to $3.56 trillion dollars by 2023.

Stronghold USD (UDS) demonstrates Stablecoins are unstable

Given these numbers, Stronghold USD could become a popular stablecoin if IBM and Stronghold and IBM build such a network. However, the available data shows Mr. Market doubts Stronghold’s claims.

In particular, Stronghold USD (USDS) had a Coin Price of $1.01 and a Market Capitalization of $404,952 on 14 March 2019. Strangely, Stronghold’s 24-Hour Market Volume of $618,041 exceeded the Market Cap on March 14, 2019. There was a circulating supply of 400,000 USDS on 14 March 2019.

Thus, demonstrating that stablecoins are not stable. Stronghold’s market volume shows a danger with stablecoins, they can lose value fast. Stablecoins lose value quickly because it is easier for owners to cash them out.

USD Coin (USDC)

The USD Coin (USDC) is yet another ERC20 cryptocurrency with some major backers. Essentially, an USDC Coin token is an Ethereum smart contract programmed to pay you $1 when spend USDC.

In particular, the popular American digital wallet, Coinbase is backing USD Coin. In addition, USD Coin is the creation of CENTRE, a joint venture of the popular crypto asset exchange operator Circle and Coinbase.

Significantly, CENTRE owns the popular crypto-asset exchange Poloniex. Moreover,the American investment-banking giant Goldman Sachs (NYSE: GS) backs Circle. Hence, USDC Coin could have the support of Goldman Sachs.

Coinbase calculates USD Coin had a 24-Hour Market Volume of $31 million,  and a Circulating Supply of 241.1 million USDC on 14 March 2019. However, Coinmarketcap estimates USD Coin (USDC) had a 24-Hour Market Volume of $30.989 million, and a Market Capitalization of $244.880 million on the same day. In addition, Coinmarketcap gave USD Coin a circulating supply of 241 million USDC and a total supply of 241 million USDC on the same day.

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