The fledgling cryptoeconomy has seen its share of stablecoin projects arise with dollar, euro, and yen pegs. Now, the space may soon be meeting one that is alternatively backed by United States Treasury securities — the debt obligations of the U.S. government.
That’s according to the plans of Arca, an American digital asset management firm that’s submitted a prospectus to the U.S. Securities and Exchange Commission (SEC) to launch a fund of U.S. Treasury bonds to back their stablecoin, the Arca UST Coin.
Designed as Ethereum tokens, UST Coins would be roughly valued at $1 USD each, though the Arca team has said the token’s value may be slightly more volatile than other stablecoin projects already on the market.
The project hopes to receive SEC approval by the end of 2019 and is working with the watchdog because UST Coin would be structured via quarterly dividends as a security under U.S. law:
“The Fund will issue its shares as digitized securities […] meaning the securities will be uncertificated registered securities, the ownership and transfer of which will be authenticated and recorded as ERC-20 compatible tokens on Ethereum, an electronic distributed ledger that is secured using cryptography (referred to as the “blockchain”). The process of authenticating a transaction before it is recorded ensures that only valid and authorized transactions are permanently recorded on the blockchain.”
If greenlighted by the SEC, the project’s fruition would mark another notable milestone in the general march of tokenization, insofar as it would open the door for more users to purchase yet another mainstream investment.
Crypto’s tilt toward the mainstream has indeed been picking up steam in recent weeks. Last month, the Universal Market Access (UMA) project, the MakerDAO team, and the decentralized DDEX exchange teamed up on USStocks, a tokenized index of America’s top stocks.
Notably, and unlike the planned trajectory of UST Coin, USStocks aren’t available to American citizens because they haven’t been registered as a security with the SEC.
How About a Gold-Pegged Coin for the Stable
The more the merrier, right?
On April 10th, Texas blockchain play AnthemGold launched its gold-backed asset token, the AGLD, with each of the coins reportedly being backed by one gram of gold each. Company CEO Anthem Blanchard hailed the arrival as an unprecedented one:
“AGLD is the first gold stablecoin available to U.S. citizens and residents and the first to be offered to U.S. citizens and residents of select states. Our mission is to increase freedom of wealth movement globally, especially to those most in need, by merging the oldest form of monetary value, gold, with the newest form of monetary value, cryptocurrency and blockchain.”
AGLD is thus among the latest in a stablecoin trend that has exploded since 2018. However, as saturation in the field increases, it’s an open question as to which projects will ultimately succeed and which ones will fall by the wayside.
At least for UST Coin and AGLD, they’re aimed at leveraging nuanced first-mover status in their genres.
Intrigue Around Facebook’s Basketcoin Grows
Social media giant Facebook isn’t just looking to get its “basketcoin,” which would be pegged to several mainstream assets, listed on exchanges. The company is also reportedly talking to venture capital firms to try and actualize large investments in the coin.
Update on Facebook’s cryptocurrency: Sources tell me that Facebook is now looking to get VC firms to invest in the Facebook cryptocurrency project we reported on earlier this year. I hear they are targeting big sums — as much as $1b.
— Nathaniel Popper (@nathanielpopper) April 8, 2019
Facebook has maintained a tight shroud of secrecy around the project to date, but recent reporting suggests the basketcoin could hit cryptocurrency exchanges at some point later this year.
The sheer gravity of Facebook’s involvement in the project could propel it, for better or for worse, toward being widely used both inside and outside of the cryptoeconomy. That dynamic could spell doom for smaller stablecoins if Facebook’s coin ends up winning over their users.