Brazilian Investment Bank BTG Pactual has unveiled the world's first dollar-backed stablecoin issued by a bank, BTG Dol, through its crypto platform Mynt. The move enables clients to "dollarise part of their equity in a simple, efficient and secure manner." The bank's stablecoin is now available for purchase starting from 100 real ($20) in the crypto app Mynt, which was rolled out by BTG Pactual in 2021 and currently supports 22 cryptocurrencies.
BTG Pactual's new stablecoin, which is backed 1:1 by US dollars, aims to provide an alternative for those looking to participate in digital asset trading while minimising the risks associated with volatile cryptocurrency markets. The bank's move into the stablecoin space marks a significant milestone for the adoption of digital assets and further underscores the growing interest in stablecoins among traditional financial institutions.
Unlike cryptocurrencies like bitcoin and ether, stablecoins are pegged to traditional financial assets such as fiat currencies, with the US dollar being the most common reference point. Stablecoins are used by investors and traders to keep their funds in the digital asset ecosystem without being fully exposed to the volatility inherent in most cryptocurrencies. The market capitalisation of stablecoins sits at around $133 billion with a 24-hour trading volume of nearly $39 billion, according to data by CoinMarketCap.
The largest stablecoins currently in circulation, such as USDT and USDC, are issued by private companies and have come under increasing regulatory scrutiny, particularly following the collapse of algorithmic stablecoin UST in 2022. However, with the launch of BTG Dol, a stablecoin issued by a bank, the regulatory oversight could be different. It remains to be seen how regulators will react to the introduction of stablecoins by banks and whether this development will result in increased adoption of digital assets by traditional financial institutions.
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