Stablecoin developer Tether is reportedly toying with the idea of releasing coins backed by commodities, according to Bitfinex shareholder Zhao Dong.
Bulk Commodity Stablecoins
Dong, who previously revealed that Tether was planning to launch the Chinese yuan-pegged coin CNHT, has once again touted the company’s next move.
According to comments made in an interview with Bitkan, Dong says that Tether is considering issuing stablecoins backed by bulk commodities such as gold, crude oil, and rubber. While Dong is not directly affiliated with the stablecoin company, he is an investor in the cryptocurrency exchange Bitfinex which shares some overlap. Dong has also been tied to previous market rumors that proved accurate, such as the case of the yuan-pegged CNHT.
Fiat-pegged stablecoins gained prominence during the bear market of 2018, during which cryptocurrency prices crashed and exhibited high volatility. However, the market for stablecoins is quickly becoming saturated and faces the overwhelming competition of Facebook’s libra when it eventually launches.
Dong revealed that Tether is concerned about being over-extended with the USDT coin, which constitutes 80 percent of the stablecoin marketplace at a capitalization of $4 billion.
The Bitfinex investors says that Tether plans to halt new USDT issuance at $5 billion, with alternative fiat currencies such as the Chinese yuan and bulk commodities being a new direction in terms of stablecoin production.