Stablecoins must have 100% reserve, says Henry Chang
Henry Chang believes that stablecoins must have a 100% reserve to ensure that user funds are protected.
Henry Chang, chief executive officer of South Korea-based blockchain game developer Wemade Co. Ltd, believes that stablecoins must actually have reserves that back their value.
He made this statement while speaking at the Blockchain Week in Busan (BWB2022) event on Thursday, October 27th.
According to Chang, a stablecoin that is not stable is an “oxymoron.” he stated that;
“For the past six months, stablecoin was, in fact, taboo amongst the crypto and blockchain scene,” referring to the collapse of Korea-born Terra’s algorithmic stablecoin. The Wemade CEO added that;
“Stablecoins must have a stable reserve as a first prerequisite. If a stablecoin [project] says they have issued a hundred dollars worth of stablecoins, they need to have a hundred dollars.”
Chang’s comments come shortly after Wemade launched its own stablecoin, WEMIX$. In the same week, the South Korean blockchain project revealed its latest blockchain mainnet, WEMIX 3.0.
The project claims that its stablecoin is fully backed by USD Coin (USDC), which is pegged to the U.S. dollar.
According to Chang, stablecoins are important in the web3 ecosystem as they could bring price stability to crypto-based assets such as non-fungible tokens (NFTs).
The Wemade CEO also believes that in a few years, more than 50,000 games will have formed their own tokenomics. He projected that the WEMIX 3.0 blockchain would be the platform to help several games make the transition into web3.
Wemade has been around since 2018 and has launched roughly 20 blockchain-based video games, such as play-and-earn MMORPG MIR4 Global.
Stablecoins have become the centre of attention in the crypto space following Terra’s crash in May. Terra’s UST stablecoin lost its peg to the US Dollar, causing billions of dollars to be wiped out from the market.
Regulators in various parts of the world are now looking to regulate stablecoin. In May, US Securities and Exchange Commission (SEC) commissioner Hester Peirce, pointed out that tougher stablecoin regulation is very close.
