Stablecoin Frax could become a threat for the US dollar
The asset will be linked to the US currency in order to make its value much more stable
Stablecoin Frax could transform in the worst nightmare of regulators led by Stephen Moore, former nominee of the Federal Reserve of Donald Trump, who made the announcement, and reported that Frax will be linked to the US dollar with the objective that its value is much more stable.
Moore reported in an interview with Fortune: “I have followed monetary policy for 30 years and I have always been concerned about the government’s monopoly over currency, which is not healthy for markets.” So he added that it was his libertarian views that led him to support this project, which he considers as an alternative with high potential for state-backed money.
It is presumed that Frax is being designed to eliminate the need for a central bank because when compared to other stablecoins, this seems to depend on a fractional reserve, so that in reality the reserves will not be one to one.
For its part, the company explains that instead of being backed by an individual group of reserve dollars, Frax will achieve stability and remain linked to the dollar through algorithms that will lend its reserves and, in turn, will charge interests.
Moore explains the following: “If I had been in the Federal Reserve, I would have liked to see a stimulus for the development of cryptocurrencies like Frax. It can be a control and balance instrument against the runaway currencies.”
K.Villarroel
Source: bitcoin
