12 March 2023 15:34, UTC
Reading time: ~2 m
Former director of developer relations at Ripple, Matt Hamilton, stated that XRP Ledger was the first blockchain to support what are now commonly referred to as stablecoins. Hamilton’s remarks came at a time of heated crisis in this sector of the crypto market when many of these tokens lost their peg to the dollar.
On XRPL, this type of asset was named and referred to as an IOU (I owe you) instrument, i.e., a debt obligation, says Hamilton. For example, a user lends $1,000 in exchange for 1,000 USDC, and on demand Circle will have to make the exchange back. Such a system, the developer explains, requires the user to clearly determine how much trust they have in the counterparty.
The shift in the concept of stablecoin, however, according to Hamilton, came with the arrival of Ethereum. People began to view stablecoins, such as USDT or USDC, as assets in their own right, rather than debt for other assets, he concluded.
Recall that at the end of last week it became known that a number of large regional U.S. banks were on the verge of bankruptcy. In particular, Silicon Valley Bank and Silvergate, two major cryptocurrency-friendly financial institutions, were hit. It was further revealed that Circle, the issuer of USDC, one of the largest stablecoins, held some of its multi-billion dollar reserves directly in SVB.
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