Aximetria Opens Up Stablecoins as a New Transaction Possibility via Its Mobile Banking App
Aximetria’s has recently added the option to do mobile transactions in stablecoin on its mobile platform, on top of fiat and cryptocurrencies. Gemini is the first available stablecoin but others will be made available by mid-2019.
As a financial payment service, the firm is making a bold move by offering all three forms of currency in their mobile banking app and this has offered some pretty clear advantages.
First, Aximetria is not a bank. There are banking commission charges and specific transactions that consumers do not have to pay for as a result. In fact, they only have 1 charge and it comes to less than $1 commission per transaction. The United Kingdom’s brick and mortar banks, for example, see charges regularly between $32 and $39 when transferring a large amount of money on the same day.
Secondly, the blockchain technology it uses means consumers have a non-bank verified ledger in real time of all transfers with automated system nodes offering more security.
Because the company was set up in Switzerland, one of the first regions to set up a regulatory framework around cryptocurrencies, they are bound to FINMA which allows a multitude of things including the ability for anyone in any country in the world to sign up with them. They must only meet standards within the company’s know-your-customer identification service and follow international law.
Account holders will also receive a free MasterCard that will allow them to transfer digital currency and tokens to their card via the value they hold in any currency of their choosing. It being on blockchain will give the consumer the most up to date exchange rate.
The Bitcoin bubble hit a high of almost 20k in value in December 2017 and had lost 75% value by November the following year. It’s now worth just shy of $4,000 per coin, a decrease attributed to rumors of capital gains taxes, a massive sell off all at once, and Goldman Sachs abandoning plans to launch a cryptocurrency trading desk.
Some investors are prepared to take the risk by buying during the low with the promise of the cryptocurrency market’s volatility meaning the price will jump back up.
But forecasts predict something different, with the CEO of BountyOx, Pascal Thellman, saying he expects crypto to keep bottoming out through early 2019. Alex Sunanrborg of Tetras capital agrees and thinks Bitcoin hasn’t reach its low point yet in 2019 and Vinny Linghman of Capital expects the recovery to be more long-term.
Banks point to this volatility has proof that crypto is cannot be a reliable currency right now. On top of hurting investor wallets, this fluctuation since 2017 has made banks wary of dealing in it. These same principles have applied in bank reluctance to borrow fiat currencies like Indonesian Rupiah or Argentinian Peso. From a practicality standpoint, it would be difficult for banks when managing cryptocurrency payments due to extreme fluctuating exchange rates.
Consumers can also be scared off from using it for this reason. A minority of firms have agreed to pay employees in bitcoin but similarly to banks, the value of that offer would drastically change in the context of one year. A contract requiring payment of a certain amount of coins could end up being worth a lot less or a lot more at a later date.
Paying employees in dollars or Euros just makes more economic sense because of its stability and saves a lot of time. Employees can also be wary of accepting a position that pays in crypto because any savings in that coin could drastically depreciate at a moment’s notice.
The Salvation Of Stablecoin?
Alexey Ermakov, Aximetria CEO, had this to say:
“We want to be able to help people in regions with high inflation or limitations to be able to sell, buy and save in stablecoins which are tied to global traditional currencies, like the Euro and Dollar. They are good because they have a fixed rate and do not have significant price fluctuations. While they are devoid of the main drawback, which led to disappointment in cryptocurrencies – huge volatility, that is, price volatitlity.”
Crypto was once the alternative fiat currency but its history of instability as a price point means the creation of stablecoin may now serve as a better digital alternative for banking and paying internationally.
Stablecoins are tied to the value of commodities like gold or other base metals or to fiat currencies like the Euro. It’s what provides their stability as the worth of the value it’s tied to do not change erratically on average. It also uses algorithms to manage supply and demand to prevent sudden inflation through more currency being in circulation than what is on reserve.
Gemini, the coin Aximetria has made available, is tied to the American Dollar.
On the reverse side, cryptocurrency still offers more privacy and security through its autonomous, node-based blockchain-run transfer system. It also has a cheaper, instantaneous transfer 24/7.
“Stablecoins do not allow you to get rich overnight, but they retain all the advantages of cryptocurrency. The exclusiveness of ownership, the cheapness of transfers and the ability to open a quasi-currency account are all invaluable in 2019.” – Ermakov.
Will those truths prevent stablecoin from reaching the same heights of popularity? It remains to be seen.