Friday, March 16, 2018

Are Stablecoins the next evolution of cryptocurrencies? A company called Quintric wants to find out if they can make resource backed cryptos legal tender

Out of all the actual and potential attributes that cryptocurrencies represent, volatility still remains high up on that list.  And because of this, the chances of the majority of them ever reaching a critical mass where they can be used as a viable medium of exchange remains low.

However as we have mentioned here a number of times at The Daily Economist, 2018 is appearing more and more to be the year of the gold, oil, diamond, and resource backed crypto.  And a company called Quintric believes that this evolution could give rise to a class of cryptocurrencies known as Stablecoins, which have their own potential to emerge one day as legal tender instruments.

Cryptocurrencies do not always carry the label of “legal tender” in most countries. In fact, the number of countries where Bitcoin and altcoins are legal tender can almost be counted on one hand. Quintric is trying to change that by issuing legal cryptocurrencies backed by silver and gold. It is quite an interesting project, although its chances of success are unknown. 
It is safe to say stablecoins are becoming the new hot commodity in the financial sector. For those who are unaware, a stablecoin is a (digital) currency pegged to the US dollar, precious metals, or other types of assets which tend to retain their value most of the time. In the case of Quintric, the team aims to issue cryptocurrencies which are legal tender and backed by both gold and silver. It is an interesting decision, although it’s one that will also be somewhat controversial. 
Quintric wants to combine the best aspects of precious metals, cryptocurrencies, and legal tender in one package. This is all much easier said than done, as not everyone in the US is legally allowed to issue their own digital currency, regardless of what it is backed by. In the case of Quintric, it will be interesting to see how that venture plays out in the long run. 
The advantages Quintric offers over traditional cryptocurrencies, fiat currencies, and precious metals are quite evident. This token is not a security, as its official legal definition is a “deed to legal tender”. At the same time, Quintric wants to ensure these coins – known as Quints – are spendable, tangible, scarce, and possess inherent value. We may see a lot more currencies backed by precious metals and other natural resources in the future if this project proves successful. – The Merkle


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