The Bit Trade team, one of Australia's oldest bitcoin exchanges announced a partnership with Emparta, the blockchain platform for headhunting. In the joint forces, the companies will create and launch the first Australian stablecoin backed 1:1 by the Australian dollar. The launching is scheduled for the next year.
We’re partnering with @Emparta to launch Australia’s first currency-backed #stablecoin! Find out more. #BitTrade #Emparta #cryptocurrency https://t.co/V6Z5z9IQLU
— Bit Trade (@btradeio) September 20, 2018
A new coin, which has not yet received a name, is being developed for the implementation of direct cryptocurrency payments between the blockchain- infrastructure of Emparta and the Bit Trade services.
According to the managing director of Bit Trade, Jonathan Miller, the stablecoin provided by the Australian currency eliminates the gap in the market, will act as a buffer that mitigates fluctuations in the rates of the cryptocurrency.
“Stablecoins solve one of the principal issues that may drive investors seeking steady returns and merchants that currently accept traditional currency away from digital currencies: volatility. We believe that stablecoins will boost trust, accelerate wide-spread adoption, and could function as the backbone of blockchain-based financial applications, especially here in Australia, given the favorable regulatory environment,” Miller wrote in a statement.
Bit Trade and Emparta are currently working on a prototype. To finish it, it will take a little less than a month. Emparta writes in a post on Medium that the initial stocks of stablecoin will be stored in Australia.
"The first reserves will be located in Australia in order to support the first partner platforms - Bit Trade and Emparta Payments - as well as the release of the first stablecoin, provided with Australian dollars," Emparta writes.
The announcement of Bit Trade and Emparta came almost two weeks after Gemini - the crypto exchange, launched by the Winklevoss brothers - announced its own stablecoin backed with U.S. dollars.
However, the idea of stablecoins is uncommon - even though they serve as bridges between fiat and cryptocurrencies. For example, soon after the announcement of Gemini, professor of economics at the California Institute in Berkeley, Barry Eichengreen questioned the feasibility of stablecoins.
According to him, fully-guaranteed stablecoins require large expenses from the issuing firm, since each token must be supported by an equivalent amount of the fiat asset with which it is affiliated. On the other hand, with regard to partially secured stables, if investors for some reason lose credibility with the issuing firm, then all will end with a mass liquidation of the tokens in conditions when the issuing firm will not have enough funds to buy out the entire offer.
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