Can The Standard Replace All Stablecoins?
While over a dozen different stablecoins have been added to the market recently, The Standard still makes an exciting addition. It provides a very different pegged currency, as it does not involve being backed by traditional fiat currency reserves. Some people wonder if The Standard can replace all stablecoins, although the bigger question is whether it needs to.
A revolutionary backing system for Stablecoins
The big difference between The Standard and other stablecoins is how the stable currency is created. Typically, stablecoins can only be generated when they are completely backed by a fiat currency such as the Euro held in a bank account. While The Standard isn’t the first to generate algorithmic stablecoins, the way they “back” their coins is a first. This is because there is no reliance on one particular type of collateral, meaning “backing” can come from a range of different assets and currencies, creating a very intriguing concept. Moreover, there is no tie to bank accounts holding fiat currency reserves either, and all the collateral used to back the stablecoin generation is completely transparent. This adds an additional layer of attraction to potential customers, as it is known that some other similar protocols have fallen under scrutiny for their lack of transparency when it comes to identifying their fiat reserves. With The Standard, secrecy is not possible, because the reserves are formed by the combined collateral provided by customers themselves, rather than funds directly from The Standard bank account.
Another interesting difference of The Standard is letting users collateralize both cryptocurrencies as well as precious metals / physical rare assets. This allows the project to tap into two massive markets capable of contributing trillions of euros in liquidity. Most importantly, it allows The Standard to create a stable currency that doesn’t require banks or other financial institutions, nor do users need to sell their collateral to use the Standard Euro.
Should It Replace All Other Stablecoins?
The cryptocurrency and blockchain space is open to anyone and everyone. Therefore, no project should dwarf all others, as that defeats the purpose of the blockchain in the first place, especially where financial assets are concerned. Stablecoins are an intriguing addition to [decentralized] finance, and having more providers is a good thing for customers. The different variations in each of the services offered can provide different advantages when it comes to lending, borrowing, and yield farming, depending on a customer’s intentions. Competition is also healthy to foster innovation and ongoing developments.
The Standard does not envision replacing all other stablecoins. Instead, the objective is to offer an alternative and transparent asset backed banking system that does not exist within the current stablecoin framework. It also extends this service to people who own valuable untapped physical assets as well as digital assets.
The Standard also promotes collaboration with different projects who tap into different customer cohorts. To date, it has collaborated with DeltaHub Capital, Coinnexus, Fish DAO, Wolves of Alt street, Vaultoro and LuaSwap.
Closing Thoughts
It is good to see projects like The Standard raise the bar for how stablecoins should be created and issued. That doesn’t mean it will — or needs to — replace the existing currencies on the market by any means. There is plenty of room for collaboration, as the industry will only grow and evolve when more trust and security is introduced.
