Silvergate’s Closure of Real-Time Payment Network May Fuel Stablecoin Adoption

03/08/2023 21:44 • Daily Digest • 77 views

It is reported that a new study by Kaiko, a digital asset data provider, found that Silvergate’s decision to close its real-time payment network may promote investors to use stable currency in cryptocurrency transactions. The study predicts that investors will not deposit US dollars in exchanges using Silvergate’s SEN and other bank tracks, but will deposit them in stable currency issuers to receive stable tokens before transferring them to the exchange.

Report: stable currency can benefit from the plight of Silvergate

Analysis based on this information:

The Kaiko study has reported that Silvergate’s decision to close down its real-time payment network could lead to an increase in stablecoin adoption in the world of cryptocurrency. The research suggests that investors may choose to deposit their US dollars in stable currency issuers instead of in exchanges utilizing Silvergate’s SEN and other bank tracks. This would allow them to obtain stable tokens before exchanging them on the platform.

The move towards stable coins is clarified by the study as being fuelled by the inability of users to conduct transactions in the US dollar currency on exchanges and the loss of clients’ access to real-time payments, which were some of the benefits offered by Silvergate’s SEN. Therefore, stable coins offer a practical solution for investors to conduct their cryptocurrency transactions without incurring the risk of currency fluctuations.

Stable coins are increasingly being used as an alternative to traditional cryptocurrencies as a means of storing value and circulating money. These digital tokens are pegged to a particular currency or a basket of currencies and are designed to be resistant to market volatility. One of the prominent examples of stable coins in the market is Tether (USDT), which has maintained a stable exchange rate of $1.

Despite criticisms of stable coins being centralized and unregulated like traditional cryptocurrencies, they have garnered a lot of attention from investors and institutions alike for their ability to mitigate uncertainties caused by the fluctuation of asset prices. This has led to a proliferation of stablecoins across various industries such as e-commerce, real estate, and even online gaming.

In conclusion, Silvergate’s decision to close its real-time payment network may accelerate the adoption of stable coins in cryptocurrency transactions. This provides a timely opportunity for stablecoin providers to innovate and offer solutions that address the challenges that users face in traditional cryptocurrency transactions. It remains to be seen whether the trend towards stable coins will transform the way we conduct digital transactions in the future.

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Silvergate’s Closure of Real-Time Payment Network May Fuel Stablecoin Adoption

Report: stable currency can benefit from the plight of Silvergate

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