Stablecoins are digital currency tokens that are correlated to a specific fiat currency or precious metal. Global currencies, like the US dollar or the euro, are examples of fiat money. A link between fiat money and cryptocurrencies is provided by stablecoins. BitUSD, which debuted in 2014, was the very first stablecoin.
There are various kinds of stablecoins, despite the fact that they are digital tokens pegged to the value of another asset. 2022 has been a tremendous year for stablecoins, and ample developments have occurred. From the fall of TerraUST and various countries passing favorable laws for stablecoins, here’s what’s happened in 2022.
Stablecoin developments in 2022
The bear market persisted all throughout 2022. However, when the Terra ecosystem fell in May, that took a major toll on stablecoins. TerraUST, which was supposed to maintain its peg at $1, fell to almost zero.
Ever since the scrutiny of stablecoins began, issuers have also been urged to release the proper asset reserve proofs to bring back the lost trust. However, the situation gradually improved, and new coins and regulations started to emerge:
After posting the request for its decentralized stablecoin on July 7, the AAVE DAO approved AAVE’s proposal for the development of the algorithmic stablecoin GHO.
Recently, Novatti Group announced that its agreement with Ripple and Stellar to develop its AUDC stablecoin was still in effect. The Australian business intends to issue the same on the Stellar Chain and the XRP Ledger.
The company that issues the USDC, Circle, also launched a new stablecoin in June called the EUROC. It is backed by US institutions that hold euro reserves and is pegged to the euro. The stablecoin issuer intends to add Solana to its cross-chain protocol in the first half of 2023.
The stablecoins must be entirely backed by the issuer’s operational funds, according to new stablecoin regulations released by New York. Stablecoin issuers are urged to comply with reserve requirements and to carry out monthly audits under the Department of Financial Services’ guidance.
According to the latest reports, Emurgo, a founding platform of the Cardano blockchain, was about to launch the USDA. This stablecoin is supposed to debut in early 2023.
Circle Internet Financial has announced that it will not go public. They have collectively decided to discontinue their agreement with Concord Acquisition Corp. through the announcement.