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Will stablecoins eventually dominate the crypto market?

Now 12 years old, Bitcoin was designed as a global, decentralized currency free from the dead hand of central banks.

But the extreme volatility of cryptos like Bitcoin (BTC) and Ethereum (ETH) has led to the emergence of stablecoins backed by fiat currencies like the US dollar, euro, and rand. Of the top 20 cryptos ranked by market capitalization, stablecoins account for five.

Stablecoins combine the meticulous record keeping and transactional capability of blockchain technology with the stability of fiat currencies.

“One of the main areas of focus in building the OVEX exchange has been to offer the widest possible range of stablecoins in South Africa,” said Jon Ovadia, CEO of OVEX.

“Stablecoins are increasingly playing a pivotal role in the crypto-sphere and are the very foundation of the entire DeFi (decentralized finance) ecosystem, where people are discovering thousands of exciting new ways to invest and earn returns outside of traditional banking.

“Currencies other than the US dollar are underrepresented in the stablecoin market, which we have set out to correct.”

For citizens of countries like South Africa that place restrictions on citizens’ ability to own currency, stablecoins offer a way around this problem.

In particular, it allows South Africans to have access to foreign currencies.

The rand is a volatile currency and very often tends to overreact to political, economic and social unrest. OVEX allows you to bypass currency exchanges.

A world Bank report claims that Africans have to pay up to $12 for every $100 sent home and to South Africa, which has the highest remittance costs on the continent – nearly 21% of money sent to transfer is spent on transaction fees.

As of August 2021, the stablecoin market was estimated at $113 billion, according to U.S. Securities and Exchange Commission Chairman Gary Gensler, and that figure is expected to increase exponentially in the coming years.

Use cases for stablecoins

  • As a store of value: because they are backed by real fiat currencies, they are not subject to volatile fluctuations.
  • As a place to park funds during periods of volatility in the crypto market. Traders are heavy users of stablecoins, shifting their crypto profits into stablecoins and back into speculative cryptos like BTC and ETH when better buying opportunities arise.
  • As a payment mechanism, several million people around the world now accept payment in stablecoins like USD Coin (USDC), USD Tether (USDT), or Binance USD (BUSD), to name a few. All you need is a crypto wallet with an address to accept these payments, which often only take seconds.
  • They provide access to the growing DeFi market where investors can lend, borrow, earn interest, and transact outside of the traditional financial space. There is also a huge demand for stablecoins to participate in the non-fungible token (NFT) market where digital properties are bought and sold, sometimes at outrageous prices. Many crypto investors are looking for a generous return. OVEX’s interest account earns 10% per year on select cryptos and up to 20% depending on fund volume.
  • As an alternative banking system: Anyone with a crypto wallet (and many of them are free) can send and receive funds in several different cryptocurrencies or stablecoins at extremely low transaction fees.
  • Stablecoins are used to bridge the gap between DeFi and traditional financial services, such as enabling borrowing and lending without the presence of a third party.

Source: DeFi Pulse

OVEX offers the widest selection of stablecoins in South Africa

OVEX also allows users to switch to different stablecoins such as USD Tether (USDT), True USD (TUSD) and USD Coin. These stablecoins are backed 1:1 by the US dollar (although some are more reliably backed than others). They are popular among crypto traders looking to park their profits in a more stable asset than BTC and ETH. OVEX offers a range of stablecoins backed by different fiat currencies.

Other stablecoins available through OVEX include several issued by Iron Bank such as Euro, Australian Dollar, Swiss Franc, Yen, and British Pound.

OVEX Over-the-Counter (OTC) Office

OVEX recently announced that it was exiting the crypto arbitrage business – which accounts for a small percentage of its total revenue – to focus on its core OTC business and build an international network.

The OVEX OTC Office offers institutions and high net worth individuals a secure and private channel to purchase crypto of any volume.

The problem with buying large volumes of crypto through most exchanges is that the liquidity is not deep enough to settle the trade all at once, which means the trade can take hours or even days. to fully execute at prices that are everywhere. OVEX solved this problem by having a deep-pocketed funder.

Whether the trade size is R500,000 or R200 million, OVEX is able to execute a trade at a price without slippage. This is only possible thanks to its ultra-deep liquidity engine, which means that it has sufficient capital and technological infrastructure to be able to execute and settle very large volumes which are often too long for regular exchanges. OVEX is backed by Invictus Capital, which manages approximately $150 million in crypto assets.

To get started on OVEX, click here.

Presented by OVEX.

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