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Encryption is supported by the computer: different rules will have to change the ‘stablecoin’ game

LONDON (Reuters) – Some of which are backed by dollars. The others are gold. However, this “stablecoin” and is not tied to a single major point – it is supported by any other cryptocurrency.

FILE PHOTO: a representative of the Ethereum virtual currency is on the PC motherboard can be seen in this image, the image for February 3, 2018. REUTERS/dado Ruvic/Image/File Photo

Stablecoins, such as Facebook’s (FB.D) Scale, a new breed of cryptocurrencies, which aim to avoid the wild price swings that bitcoin is bad for the market. They are based on their value, the more stable the underlying assets, usually in the traditional currencies or commodities.

But the Bridge, a significant difference compared to the others, and it makes use of a type of digital currency, ethereum – is to maintain on a continuous basis.

This can be shown on the face of the common sense, but supporters say that’s the way it works with “smart contracts,” blockchain-based, related to the provisions of the code have different rules it is a final value while providing transparency.

Stablecoins such as a Scale and Chain are the global regulators sites, in part because of concerns about how the companies behind them, and the management of the reserves to get them back.

Th, be launched in 2017, is aimed at avoiding such problems in the display of the control of the ethereum coin the value of which is linked to the lock, one of them in place of the blockchain to carry out missions with the help of algorithms. That is, supporters say, the benefits of stablecoins – instant transaction and is a constant value, and the avoidance of management risks.

It’s gaining some traction: the aid agency, Oxfam, is to test the distribution of the aid, on an island in the Pacific ocean, where some of the Argentine of depositors, desperate to keep the rate of inflation to be used.

How are the regulators for the treatment of the Sand can help to give shape and form to what, and when, and cryptocurrencies may change from speculative to use as a de-facto currency of the internet. However, their response is not yet fully understood.

Reuters has been keeping track of the attendance of the candidates in order to bitcoin as the “altcoins”, as they are attracting more and more attention from investors, regulators, firms, and individuals.

The fourth in the series, looks to be Located in the.

HOW DOES IT WORK?

As bitcoin is Th, the power of the digital economy where people will be able to work around this problem, banks and other financial corporations trade directly with each other. The effect is complex.

Th is is, in fact, linked to the u.s. dollar, and is backed by the ethereum cryptocurrency locked up in the public contracts, which are recorded on the blockchain.

A lot of stablecoins to be trusted, because its value is backed up by the central bank and the currency. Users can trust the Bridge, but on the other hand, if ethereum is that it is locked in place in the contract will always be greater than the value of the Dai in the life.

Once Located, the value of the dwelling is too far away from the us dollar, and the assessment of the mechanisms to kick the lead back.

“Having a local stablecoin, as you can see on the blockchain,” said Rune Christensen, the founder of the protocol is that the Bridge is running on it, MakerDAO. “Anyone can be a” real-time monitoring.”

Click here to view an interactive version of this figure.

WHO IS IN CONTROL, THEN WHAT?

Bridge is not (yet) be fully decentralized.

In the Cayman Islands, registered with the Maker Foundation, which is run by Copenhagen, which is overseeing the technology.

The foundation, which is led by a Film, develop, code, and other projects, which it hopes to release Dai and MakerDAO can be fully controlled by the user.

Mariano Conti, head of smart contracts, and said that he hoped that the foundation would cease to exist within a two-to-three years of age.

“The goal here is to bootstrap the system until it is no longer necessary,” said Conti, who is based in the city of Buenos Aires.

But the risks that exist in the governance model.

Deficiencies in smart contracts, for example, could leave it vulnerable to exploitation, and the theft of assets that are stored on the blockchain, said Timothy Stranex, co-founder of the Luno, a crypto exchange in London.

MakerDAO says it is a “safety” mechanism to protect against attack. The users who are trying to take over the protocol, it says that the lock would be activated to protect against a collateral and the money will be returned to you.

Click here to view an interactive version of this figure.

HOW DO THE REGULATORS SEE IT?

It is not yet fully understood.

Cryptocurrency-backed stablecoins was not within the scope of the G7-report www.bis.org/cpmi/publ/d187.pdf last month, he said, their ability to maintain a constant level in the medium term, it is the question.

U.S. regulators declined to comment on the Bridge.

The uk’s Financial Conduct Authority said that it did not use the term “stablecoin,” in view of the stability, it was merely a desire, and an in-depth case-by-case analysis is required.

Stablecoins such as a Bridge, a new front for regulators as they seek to harness the fast-moving world of cryptocurrencies, authorities said.

“The regulators are trying to fit into the existing framework to the new technologies,” said Phil, Angeloff, a lawyer at Clifford Chance in Washington, who has been working on stablecoins.

Click here to view an interactive version of this figure.

WHAT IS THE PROCESS OF PASSING AWAY IS IN THE REAL WORLD.

Better than a lot of cryptocurrencies are used mainly for speculation.

Oxfam has been testing different rules for the distribution of aid to the Pacific island state of Vanuatu, it is sensitive to natural disasters. It gave the Bridge a is 200 people and 30 vendors in one of Vanuatu’s 80-plus islands, to the building of a mini Sand-based economy.

“It puts us in a position to control and interact economically with each other directly, and more quickly after a disaster,” said Oxfam’s and Sandra’s Heart, speaking from the Vanuatu capital, Port Vila.

A more detailed version of the study, which is planned to be in Vanuatu next year, Hart said, are scattered all over the different islands.

Dai is also attracting the attention of inflation-hit Argentina.

Details are scarce, but a Telegram is a messaging group for the Th user in the country, has doubled in size to more than 450 members in the past few weeks, the Creator of the Foundation, ” Conti said.

Reuters spoke to five of the users in cities and towns across the country, said the Bridge provided an opportunity to protect their savings against the mexican peso, a decrease in the value of it.

“It was my mother, and I have started to save part of the money in the Sand,” said She Sejas, a law student in the western city of Mendoza.

“No, We can’t save all of our money into pesos. Every month we have this month. You have to be creative in order to survive the decisions of our politicians.”

Located in the decentralisation process has made it an attractive alternative to other stablecoins, said Jose Villar, a program manager in the city of Buenos Aires.

“All of the others, there is some entity behind it, that it may be a bank, and we don’t know who is really behind them.”

Report by Tom Wilson; Additional reporting by Pete Schroeder of Washington; Editing by Pravin Char

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