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- Agora CEO Nick van Eck claims that yield-bearing stablecoins are not stablecoins or money.
- Van Eck points out the challenges of yield-bearing stablecoins and introduces AUSD as a solution.
- The CEO hails Agora’s AUSD as a Stablecoin 3.0 that can strengthen the whole industry.
Nick van Eck, the CEO of the stablecoin issuer firm Agora, recently shared insights on “yield-bearing stablecoins,” stating that they are “not money or stablecoins.” To be clearer, van Eck asserted that stablecoin issuers that offer a passive income to holders deviate from the core mission of stablecoins.
“Yield-bearing stablecoins” are not money or stablecoins. Stablecoins are already a $150 billion market and settle $10T annually. We see them growing to $3T by 2030. “Yield-bearing stablecoins” are not part of this market.At @AgoraDollar, we believe that digital dollars are…— Nick van Eck (@Nick_van_Eck) May 27, 2024
Elaborating on the matter, van Eck drew attention to the evolution of stablecoins from Stablecoin 1.0 to Stablecoin 2.0. He noted that Bitfinex and Tether were the first to introduce centralized digital dollars. While USDT is one of the best examples of Stablecoin 1.0, many stablecoins have emerged following Tether’s growth.
Describing the characteristics of yield-bearing stablecoins that disqualify them as stablecoins or money, van Eck highlighted two major issues—lower utility and acceptance and lack of margin for development. Van Eck asserted that liquidity issues are a common problem in the yield-bearing stablecoin market.
Many countries, including the United States, consider yield-bearing stablecoins securities, limiting customer reach. The Agora CEO emphasized that they are not “freely tradable” and that they constrain “liquidity providers, vendors, and a higher utility ceiling.”
Furthermore, van Eck described yield-bearing stablecoins as a complement to AUSD, USDC, and USDT. Introducing Agora’s AUSD stablecoin as the “next iteration of stablecoins,” or simply Stablecoin 3.0, van Eck stated:
“We designed AUSD’s model to be the best stablecoin for your business. We compensate businesses based on services they provide, some of which include: listing our token, providing liquidity, marketing, and accepting AUSD as payment or collateral on their platform.”
Moreover, van Eck announced the launch of AUSD on Ethereum Mainnet in June. He added that the use of AUSD could strengthen the whole crypto industry.
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