Report: stable currency can benefit from the plight of Silvergate

It is reported that a new study by Kaiko, a digital asset data provider, found that Silvergate’s decision to close its real-time payment network may promote investors to use stable currency in cryptocurrency transactions. The study predicts that investors will not deposit US dollars in exchanges using Silvergate’s SEN and other bank tracks, but will deposit them in stable currency issuers to receive stable tokens before transferring them to the exchange.

Interpretation of this information:

The digital asset data provider, Kaiko, reports that Silvergate’s decision to terminate its real-time payment network is likely to encourage investors to rely more on stable currency in their cryptocurrency transactions. According to the study, instead of depositing US dollars in exchanges that use Silvergate’s SEN and other bank tracks, investors will opt for stable currency issuers to receive stable tokens before transferring them to the exchange.

This development is a result of Silvergate’s decision to focus only on transactions in Silvergate Exchange Network (SEN), a platform for trading digital assets, effectively ending its real-time payment system which enabled instant deposits and withdrawals of funds. The study argues that investors will no longer want to wait for the lengthy process of transferring money from a bank to an exchange, prompting them to embrace the use of stable currency.

Stable currency is a type of cryptocurrency that’s designed to hold a stable value. This token is pegged to a reserve asset like gold, fiat currency, or a combination of both. This is unlike other cryptocurrencies like bitcoin whose values fluctuate frequently. The study predicts that stable currencies will become more popular as more investors switch to the currency. It also hints that the shift could drive up the value of stable currency, thereby making it more lucrative to invest in.

In conclusion, the study highlights that Silvergate’s decision to shutter its real-time payment network may lead to a surge in the use of stable currency in the cryptocurrency market. The switch to stable coins will enable investors to bypass Silvergate’s SEN and other bank tracks, offering them a more efficient and faster way to deposit funds in exchanges. Consequently, this shift may drive up demand for stable currencies, making them attractive to invest in.