Two US-Audited Stablecoins Debut, Experts See Massive Impact on Crypto Market

Experts believe that the emergence of fully audited, legitimate and licensed stablecoins will have a profound impact on the crypto market, especially in the long-term, as it provides investors a way to retain value without being exposed to the volatility of the market.

Prior to the launch of GUSD and PAX, only two stablecoins - Tether and TrueUSD - existed in the market, both of which have been integrated by major cryptocurrency exchanges like Binance, Bitfinex, OKEx, Huobi and HitBTC. Tether and TrueUSD deployed USDT and TUSD on the Omni and TrustToken blockchain networks rather than relying on the reputable ERC-20 token contract of Ethereum.

In the early days of Bitcoin, many investors in the cryptocurrency market called for an autonomous economy that operates independently from the broader financial market and government-controlled markets.

As the market started to grow and regulated financial institutions began to take interest in the market, the cryptocurrency market has become more intertwined with the global finance sector.

"Non-correlation is not the same as inverse correlation, so there's no guarantee that when the market goes down crypto will go up. Over the long term, we think the fundamental drivers of crypto are different from the fundamental driver of equities and other assets, and we would expect the low correlation to persist."

Since April of this year, Gemini has been working closely with Nasdaq to integrate market compliance and surveillance programs to appeal to regulators and to legitimize the cryptocurrency exchange market.

The first step toward the institutionalization of a market is to create trusted custody solutions and appropriately regulate the spot market of the asset class to ensure stability and transparency.

"Since launch, Gemini has aggressively pursued comprehensive compliance and surveillance programs, which we believe betters our exchange and the cryptocurrency industry as a whole. Our deployment of Nasdaq's SMARTS Market Surveillance will help ensure that Gemini is a rules-based marketplace for all market participants."

Tether was brought into the cryptocurrency market by the integration of Bitfinex, one of the leading cryptocurrency exchanges in the global market.

Still, regardless of the stability in the value of stablecoins, Eichengreen said that stablecoins are still not viable for various reasons, with the main factor being the vulnerability of the market to tax evaders and criminals.