Does the world need more stablecoins? Yes according to VCs, who have thrown hundreds of millions of dollars at projects developing stable or low volatility digital assets. The $45 million committed in 2019 takes the past two years of VC investment to over $200M.
Also read: RBI Governor Discusses Crypto and Central Bank Digital Currency
A Stable Full of Stablecoins
Stablecoin projects need venture capital firms, just as VCs need crypto projects that have a high chance of gaining mass adoption – and stablecoins seem a safer bet than altcoins. Given that the nature of fiat-pegged digital assets precludes the possibility of price appreciation, a public token sale is off-limits. Instead, venture capital from crypto-focused investment firms, which often seek equity, is the preferred route to stablecoin funding. The following are just some of the stable or “stable-ish” digital currencies to have emerged this year through VC funding.
Saga
Saga (SGA) is a digital token designed to serve as a general purpose global currency. It’s backed by a basket of monetary reserves, which it will gradually gravitate away from through a monetary model that will constrict the circulating supply. Saga’s designers aim to create a low volatility coin with “dependable value,” governance, and compliance built in. The project, which is launching this month, raised $30M in 2018 with backing from Lightspeed, Mangrove Capital Partners, and Vertex Ventures.
Terra
Stablecoin project Terra raised $32M in 2018 with seed funding from the investment division of four of the six largest cryptocurrency exchanges including Binance Labs, Okex, and Huobi Capital. Terra is working on a stablecoin and blockchain payment solution which it’s integrating into the Terra Alliance, a Libra-like consortium of global ecommerce partners.
