Institutional investment and greater public perception necessitate new mechanisms in the cryptocurrency industry. While Tether (USDT) paved the way for the current expansive stablecoin sector, investors have grown skeptical of Tether – allowing other projects to flourish. Celo is a non-profit organization built around providing a multitude of pegged cryptocurrencies, and an ecosystem to support them. Crucially, Celo provides more than a simple US dollar-pegged stablecoin. Their Euro-pegged cEUR stablecoin adds the option for fiat trading.
Recently, the Opera web browser integrated Celo’s cUSD and cEUR into their native cryptocurrency wallet. The inclusion is reportedly due to Celo’s “mobile first” philosophy, and a shared focus on providing remittances for migrant workers. Celo’s system allows users to send cryptocurrency directly to a receiver’s phone number – an ideal situation for remittance payments. Between their USD and Euro offerings, Celo covers the vast majority of potential remittances, providing a means to transfer funds across international borders with significantly reduced volatility.
The Ghost of Facebook’s Libra
In the recent past, the Facebook juggernaut set its eyes on the cryptocurrency industry. Their proposed “Libra” cryptocurrency would create a wide range of fiat-pegged stablecoins for use in digital banking infrastructure. Taking into consideration the sheer reach of Facebook’s products, government regulators around the globe panicked. They made it abundantly clear that they would fight the Libra project from start to finish. As such, Zuckerberg and Facebook quietly backed down and regrouped.
While Libra may be dead, at least temporarily, many believe that Celo embodies the same ideas. Subtle differences in governance and structure may allow Celo to succeed where Libra failed. After all, Celo is a non-profit organization and they back their pegged assets with cryptocurrency rather than fiat. Of course, Celo remains a comparatively small project. If they succeed on any major level, they too may face regulatory scrutiny.
Why Does the Cryptocurrency Industry Need Stablecoins?
Before the advent of stablecoins,
The industry immediately felt the impact. Now able to assert control over their investments, users flooded the market and created the 2017 bull market. As stablecoin technology becomes more mature, we are seeing the expansion of decentralized finance and the creation of a new financial ecosystem. Celo’s project is one of several at the forefront of this revolution.