Cryptocurrencies are fast gaining traction in the world of finance. In today's digital world, people are increasingly buying into the concept of cryptocurrency as a new mode for monetary transactions as well as for investments.
Regardless of what cryptocurrencies stand for to you on a personal level, it pays to be in the know of this thing they call digital money. KriptoSlots commits to bringing the latest news on this hot topic. Be sure to check this space regularly.
Aug 5, 2021
Bridging the Gap Between Cryptocurrency and Traditional Money
While investing in cryptocurrency might be a smart way to balance out your investment portfolio, the ways in which we can use digital assets to buy actual goods are limited. That’s because it’s not always easy to exchange cryptocurrencies like Bitcoin (BTC) into fiat money that you can use to make purchases. Plus, most places don’t accept digital currency for payment — yet.
Additionally, cryptocurrency volatility makes it difficult to count on the value to pay for everyday items. These digital asset facts might keep people away from the crypto market altogether.
But there is a way to easily exchange your cryptocurrency for fiat that most people don’t know about. It promises to open doors for cryptocurrency firms and individuals as well. That way is through stablecoins.
How a Stablecoin Works
A stablecoin is a new type of cryptocurrency that, as the name suggests, offers price stability and is backed by a reserve asset, like a fiat currency or a commodity’s price, such as gold. This form of digital money offers the security and privacy like that of a cryptocurrency without the volatility. A stablecoin aims to serve as the bridge between cryptocurrency and fiat currency. A person who holds cryptocurrency can exchange it for stablecoins, and then exchange them into fiat money such as the U.S. dollars quicker and easier than exchanging the cryptocurrency directly to dollars.
Mastercard (NYSE: MA) recognized the limitations of cryptocurrency firms using its services and the opportunities for businesses to accept payment in the form of cryptocurrency, and thus launched a partnership with Circle in July 2021 to start accepting Circle’s stablecoin, USDC. This stablecoin is said to redeem 1-for-1 with the U.S. dollar, so consumers and merchants with digital wallets can transact easily. This milestone helps pave the way and open new doors for other stablecoins and cryptocurrencies to enter mainstream markets.
Addressing the Abstract
In addition to its new partnership, Circle also recently announced its plans to go public. However, it won’t be the first stablecoin issuer to report to the Securities and Exchange Commission (SEC). The lesser-known, Irvine-based fintech company, Vemanti Group Inc. (OTCQB: VMNT) was already an SEC-reporting company when it launched its stablecoin, Vemanti USD (USDV), under its subsidiary, Vemanti Digital Ltd. This should serve as a relief to investors, as the company remains true to its vision of integrity, authenticity and complete transparency to every investor worldwide. The 1-for-1 USD-pegged stablecoin is a fast, low-cost, and borderless option for businesses and individuals alike to use for various transactions, including payments, payroll, lending, trading, and remittance.
Vemanti has made ironclad reporting and compliance a primary tenet of its platform from the beginning and has been reporting to the SEC for some time, no small feat considering recent blunders and significant legal problems for both Circle and another popular stablecoin Tether (USDT). Circle recently set aside $10.4 million to settle a legal action against it by the SEC regarding a discontinued crypto exchange business that it used to operate called Poloniex. Additionally, Tether has been getting crucial inquiries and difficulties from the Department of Justice, the State of New York, and others.
The Future of Spending
As more and more people and businesses are looking to utilize public blockchains for real-world transactions, it makes sense for companies to promote and facilitate the use of cryptocurrencies in complete transparency and within existing rules and regulations in order to drive mainstream traction and adaptability. Stablecoins that are issued by SEC-reporting companies, such as Vemanti and Circle (soon), will help remediate any hesitation that consumers, investors, and businesses may have towards transacting with cryptocurrency. By taking the right precautionary measures, stablecoins will help bring forth a new global financial ecosystem that includes frictionless, borderless, and trustless digital payments, and new ways in which we transact with one another.