The global rise of cryptocurrencies has been something of a miracle. Just ten years old, the new currency format has already begun to proliferate at a remarkable rate.
While many of the issued coins and tokens have gone belly up, consumers have become more wary of the dangers inherent to the industry. Many have begun seeking out companies and currencies that have external financial backing.
In response to this need, the industry has shifted focus, and many new stablecoins—coins backed by existing companies or currencies—have arisen. In fact, there are so many of these new security-backed coins that they have begun making headlines.
Perhaps the most famous of the lot is the hotly debated offering by Facebook (NASDAQ: FB)—the Libra coin. Designed by founder Mark Zuckerberg, the coin began with substantial backing from a plethora of fintech firms. But as governments around the world began expressing their concerns about the coin, these backers started to pull away, leaving Libra in a position of doubt.
Some have said that the death of Libra could spell the end of the stablecoin era. If governments demand that the coin be banned, other stablecoins could be banned as well. However, rather than capitulate, the industry continues to offer new and exciting stablecoin options that remove the dangers for international finance.
A better plan
Saga Monetary Technologies (Saga), the UK-based blockchain and fintech firm, has announced the release of their ERC-20 compliant SGA token. The token is designed to function as a frictionless global currency. Saga has opened its online onboarding process fully for those interested in taking part in the revolutionary currency.
Saga has created the SGA token with global finance in mind. Backed by a plethora of international currencies, the SGA is designed to replicate the International Monetary Fund’s (IMF’s) SDR. However, because the SGA is not pegged directly to those currencies, the token will eventually be weaned off of dependence on fiat. This process will occur through increasing confidence in the stability of the token by its users, and sets the SGA apart from boiler-plate fiat-baked stablecoins.
Built and backed by pros
The monetary mechanisms to remove the fiat dependence are the brainchild of Saga’s elite advisory board, which includes Prof. Jacob A. Frenkel, PhD, chairman of JPMorgan Chase International and former governor of the Bank of Israel; Prof. Myron Scholes, Nobel laureate in economic sciences and professor emeritus at Stanford University; Leo Melamed, former chairman of the Chicago Mercantile Exchange (CME); and Prof. Dan Galai, PhD, former dean of the School of Management at Hebrew University Jerusalem.
The company has also received substantial backing from existing corporations. These have collaborated to provide the $30 million in seed funding that has generated the current Saga platform, and include Lightspeed Venture Partners, Mangrove Capital Partners (this isn’t the same Mangrove Partners tracked by Insider Monkey), Vertex Ventures, Disruptive, Lool Ventures, and others.
While volatility in cryptocurrencies has created a virtual mayhem of chaos in the markets, Saga’s SGA token will create a stable product that can be slowly grown into a global currency through adoption and consumer confidence. While most understand that digital currencies are the future of money, the SGA is positioned to be the future of international finance.
In spite of the risks and dangers facing the stablecoin industry, Saga’s new offering appears to take the concept to the next level. With new and innovative monetary policy, the SGA token may be exactly what the industry needs to move beyond the morass created by book and other stablecoin offerings. The future remains bright, as companies like Saga move into the space with greater clarity.