Reserve Stablecoin App 'Coming Soon' to Help Areas Affected by High Inflation Rates

The developers of Reserve, an Oakland, California-based stablecoin project, are reportedly planning to launch an app which will allow users to convert cryptocurrencies to fiat money.

According to Reserve’s management, the new app will be released in Angola and Venezuela. In addition, the company will be introducing a utility token, called Reserve Rights (RSR), which can be purchased from Huobi Prime’s token sale platform.

Reserve Dollar, Pegged 1-to-1 With USD

As noted in a press release shared with Cointelegraph, Reserve’s latest stablecoin app will be available on Google Play for Android users in the “coming weeks.” The app’s users will be able to make quick conversions between fiat currencies to Reserve’s stablecoin, the Reserve Dollar (RSD). Reserve’s developers claim that RSD is decentralized and pegged 1-to-1 with the USD.

Commenting on the launch of the new stablecoin app, Nevin Freeman, the co-founder and CEO of Reserve, revealed that his firm intends to focus on helping the citizens of areas affected by extreme levels of inflation (or hyperinflation).

Freeman remarked: 

A lot of people, including some of our investors, discouraged us from starting in Venezuela. [..] The hyperinflation there is the exact problem that Reserve is built to fix, and Venezuela is suffering the most inflation of anywhere in the world right now, so we felt that it had to be done.

Bolivar Losing 10% Of Its Value Every Day

Notably, there are at least 16 countries that have an annual inflation rate of more than 20%. The situation in Venezuela appears to be with worst, as the nation’s national currency, the Bolivar, has been losing almost 10% of its value every day.

Due to political and economic instability, Venezuela’s residents have increasingly been using cryptocurrencies, including Bitcoin (BTC) and Dash (DASH). However, a recent report suggests that cryptocurrencies are too technical for most Venezuelans.

Open Money Initiative Helping Nations In “Closed Economies”

Alejandro Machado, the co-founder of the Open Money Initiative (OMI), a project focused on researching how money is “used in closed economies” and “collapsing monetary systems,” recently revealed that Venezuelans have not completely abandoned the Bolivar.

Machado acknowledged that nobody wants the Bolivar, however they “need it to survive.” In order to help Venezuela’s residents gain access to financial services, Machado’s non-profit organization, OMI is working with globally accessible peer-to-peer (P2P) crypto exchange LocalBitcoins on various projects.

BTC Trading Reaches All-Time High

Available data has confirmed that Venezuela’s residents have increasingly been using cryptocurrencies, particularly Bitcoin. In fact, data from Coin.Dance, a website that tracks trading activity on major bitcoin marketplaces including Paxful, Bisq, and LocalBitcoins, revealed recently that bitcoin trading volume in Venezuela reached an all-time high of 35.9 billion Bolivars.

The previous high was 29 billion Bolivars in total bitcoin trading volume, which was recorded towards the end of April 2019.

Bitfinex Wants to Offer 100x Leverage For Crypto Derivatives Trading

Michael LaVere
  • Bitfinex will offer 100x leverage trading for cryptocurrency derivatives
  • According to the exchange's CTO, the hedging product is "ready for prime time"

Cryptocurrency exchange Bitfinex revealed it wants to offer derivatives products with up to 100x leverage for cryptocurrency traders. 

Hedging On Cryptocurrency Derivatives

Chief Technology Officer Paolo Ardoino told The Block on June 25 that the cryptocurrency exchange was ready to ship a 100x leverage product for certain users. According to the post, the project has been under development for some time and is “now ready for prime time.” 

The product was referenced in last month’s whitepaper published by Bitfinex for its $1 billion private token sale of LEO, stating

“Qualified Bitfinex account holders will be able to trade a new hedging product through a derivatives wallet.”

The whitepaper originally claimed that the new hedging mechanism would be released by the end of June, a timetable that fits with Ardoino’s “ready for prime time” statement. 

Ardoino confirmed that only “verified” customers will be allowed access to the product, given the risks involved in such highly leveraged trades. 

The CTO also took to Twitter to quell user concerns over Bitfinex’s existing 3.3x margin trading. Ardoino explained 100x leverage will be “optional,” and that their current leveraged trading products will be unaffected by the release. 

Big Risk, Big Reward

Bitfinex is looking to compete with rival exchange BitMEX, who already offers 100x leverage through its bitcoin perpetual swap contract. However, Bitfinex claims its product is designed as a legitimate hedging tool for clients, rather than a gambling mechanism. 

Max Boonen, CEO of trading firm B2C2, believes the product will only appeal to retail hedgers, as large investors will shy away from the risks involved in 100x trading. 

According to Boonen, 

“There’s nothing wrong inherently about 100x. But as a commercial hedger you want lower leverage margin. The larger investor wouldn’t want to take the risk of 100X, typically. They don’t want to go balls to the wall.”

The cryptocurrency derivatives market has been heating up. Last week bitcoin-bull Mike Novogratz’s Galaxy Digital announced plans to offer cryptocurrency options contracts.

Binance has also reportedly been exploring futures trading. On June 24, Binance CEO Changpeng Zhao tweeted the exchange had executed its first margin liquidation for a BTC short.