Fixed or stable cryptocurrency
A fixed or stable digital currency is one of the forms of digital currencies, but it is characterized by the possibility of issuing it against a guarantee that represents the value of basic assets. The US dollar or the euro, or linking it to other assets such as precious metals such as gold or even other cryptocurrencies.
A stable digital currency is also seen as a type of cryptocurrency designed to maintain a stable market price, and although the mechanisms differ from one currency to another, stablecoins are supposed to be somewhat resistant to market fluctuations, so that they do not face changes or fluctuations Significant prices, as many stablecoins have a fixed value as a result of being linked to the price of another asset such as the US dollar or gold.
On the other hand, stablecoins take advantage of the advantages offered by cryptocurrencies such as transparency, security, stability, digital wallets, fast transactions, low fees, and privacy, without losing the guarantees of trust and price stability that come from using currencies and legal assets as a cover.
The white paper specified that the new currency will be tasked with creating a simple global financial infrastructure that will enable billions of people to use it, as it consists of three parts that work together to create a more comprehensive financial system: it is built on secure, scalable, and reliable blockchain technology, It is also backed by a reserve of assets designed to give them real value, and is governed by an independent institution charged with developing the financial system.
Views on this currency vary between welcome and opposition, as the Bank for International Settlements (BIS) has warned that Facebook's cryptocurrency project may harm the banking sector, and the bank has published a report showing that major technology companies such as (Google, Facebook and Amazon) can establish Dominant site quickly, thanks to the extensive user network. While these companies can promote financial inclusion, they can also pose threats to financial stability, competition, and data protection, so regulators around the world must coordinate to ensure a “level playing field between big tech and banks.” The bank stated that it also needs to take a "more comprehensive" approach that takes into account financial regulation, competition policy and data privacy regulations.
One of the latest examples of global stable currencies is Facebook’s Libra coin project, which will be used in payments made through social media applications (Facebook, WhatsApp, Instagram) as a transfer of funds between users or to carry out buying and selling operations that take place through these applications. .
Where Facebook published a white paper for the development of its new currency on 06/18/2019, during which it indicated that the new currency will be fully backed by a reserve of real assets, where a basket of bank deposits and short-term government securities will be kept. in the institution's reserve for every unit of currency created, and this reserve will be managed with a view to maintaining the value of the currency, and the assets will be maintained in a geographically distributed network by Custodians; With the aim of providing security and decentralization of assets.