Fintech company, Techemynt, a New Zealand-based financial service provider (FSP), is launching $NZDs stablecoins backed one-for-one with New Zealand dollars. The stablecoin is positioned on the Ethereum blockchain by Blockchain Labs using the FiatToken framework developed by the decentralized payment network firm Centre.
The Volatility of Cryptocurrencies
The volatility of Bitcoin is no secret to anyone. From a commercial perspective, digital assets like Bitcoin and Ethereum do not have addictive use cases in the payment space, but the value of these digital coins fluctuates widely. In the past six weeks, the price of Bitcoin has been remarkably volatile falling as low as 36k in mid-February to soaring 61k in mid-March. The volatility of these crypto currencies is unrealistic. And hence are unsuitable for transactional commerce.
Stablecoins are one of the solutions to these problems. Stablecoins are a type of cryptocurrency that is backed by reserve assets. Blockchain-based stablecoin combines the stability and value of the New Zealand dollar with the inbred utility of cryptocurrencies. This allows remittance, arbitrage, and payments in the global digital asset economy. The first stablecoin Tether (USDT) launched in 2014 is pegged 1:1 by US dollars.
The widespread acceptance of Tether was swift. The application is the third-largest cryptocurrency by market capitalization. The launch of Tether brings many other stablecoins into significance. Stablecoins pegged with fiat currencies have secured a special position in the marketplace. There are stablecoins available for CNY, EUR, GBP, VND, BRZ, KRW, SGD, CHF, IDR, etc.
New Zealand Dollar Stablecoin – $NZDs
Techemynt’s executive director Fran Strajnar accepting the need for stablecoin, said:
“$NZDs was in development for over a year and potential users will include forex and crypto traders, crypto funds, investors, and eventually merchants and everyday consumers. $NZDs will be available to buyers who wish to acquire NZ$100,000 (or more) from Techemynt directly – and smaller orders can be filled on secondary markets like the Dasset exchange (also a New Zealand registered FSP).”
Moreover, anyone obtaining $NZDs directly from Techemynt has to complete Customer Due Diligence checks in line with Techemynt’s FSP obligations under the Anti-Money Laundering and Countering Financing of Terrorism Act 2009 (AML/CFT) of New Zealand.
Strajnar believes as onramps and offramps evolve it is envisaged that $NZDs will be able to be transferred to DeFi platforms. Currently, DeFi platforms have the required potential to issue participants with much higher yields compared to traditional bank accounts.