Recently, the founder and CEO of Braveno, Mathias Grønnebæk tweeted that fiat coins should not be called stable coins. Talking factfully, there’s a difference between the two terms. He tweeted,
People need to stop calling fiatcoins stablecoins.
— Mathias Grønnebæk (@MatGroennebaek) October 23, 2018
He explained the difference between the two terms saying that the stablecoins are the ones which are there to maintain a price and minimizing the market volatility by minimizing fluctuations in their valuations. Fiatcoins differ from the definition by adding a peg to a specific currency, maintaining the peg eliminates the volatility factor for them, USD for instance. Explaining the difference further, Mathias told BlockPublisher,
..they (Fiatcoins) are stable against the currency they are backed with, so they fit the definition of stablecoin if we define it as “a coin designed to minimize price volatility”, but they should be called fiatcoins because of the way they attain that characteristic.
The fact still remains that a fiatcoin fits the definition of a stablecoin but if the difference is present, it should be identified based on that.
Fiatcoins have been a subject of discussion in the crypto world, especially with the incident of Tether losing its peg to the USD. Thomas Power, the board member of Bicra, 9 spokes and advisor of OST shared his opinions talking to BlockPublisher that the solution to the market volatility now is the introduction of fiatcoins in the crypto space. The market is showing volatility because there is lack of regulation, introduction of more fiatcoins in the space would bring more stability. Thomas Power said in his phone interview,
Blockchain geeks failed to engage the old money (fiat) in crypto hence they will pay (Because of the volatility).
He continued on stating that,
Old money invests in new ideas. Crypto is dying because of hackers, thieves and lack of confidence from old money.
Further explaining his stance on the market volatility, Thomas Power explained that the market is going to get hit by a 50% plunge across the board,
I’m a bear for everything. Expecting 50% fall across the board and shorting all of it.
Since people are being skeptical about the happenings in the stable coin space, it might be the right step to include more fiat coins in the market.