(Financial News) DigiByte project founder Jared Tate tweeted about the development of the DigiDollar stablecoin pegged to the US dollar based on the DigiByte blockchain.
According to Jared Tate, the remaining stable coins work in centralized networks without the proper level of protection. All stablecoins are controlled by centralized groups that promise to provide such coins with fiat currency in a bank account.
“Do users really trust projects that take on the function of a central bank that prints digital tokens? Who controls this money and the issue of tokens? Where does fiat money come from? ” Jared Tate asks in a series of tweets.
Want to learn about Bitcoin? Check out our other articles on Bitcoin
- What is Bitcoin?
- Who invented Bitcoin and more importantly why?
- Bitcoin transactions explained
- Bitcoin cyptography explained
Tate proposes to create a fully decentralized system in which users can independently provide purchased DigiDollars by linking them to their bank account. The balance will be confirmed in real time using a smart contract and API. In this case, there will be no centralized authority controlling the funds, because the reserves will be confirmed by millions of people around the world.
Jared Tate believes that such an initiative will be another step towards the creation of a “truly decentralized system” and the transition to digital currencies. However, to achieve this goal, it is necessary to work out the issue with banks that can block the API. At the same time, Tate is hopeful that American financial institutions can “meet” and assist in the development of a decentralized stablecoin. Nevertheless, regulators are unlikely to be delighted with this idea, because the question of compliance with KYC and AML rules remains open.
Recall that this month the European Commission and the European Council opposed the use of stablecoins in the territory of the European Union until their clear regulation is developed. In addition, in November, the US Federal Reserve Board expressed concern that stablecoins could be detrimental to the global economy.