Taking advantage of xZAR
As the range of crypto-currencies continues to expand, one emerging option is crypto-currencies pegged to sovereign currencies such as the dollar or the euro. While Bitcoin and Ethereum are the most well-known crypto-currencies, there are specific use cases that so called Stablecoins offer.
A Stablecoin is a class of crypto-currency that is backed by a reserve asset, meaning that they are not subject to the same fluctuations that is a hallmark of other crypto-currencies. AltCoinTrader CEO, Richard de Sousa, explains that a good example of this is the xZAR, which offers all the benefits of crypto-currencies, but is pegged to the South African rand, so 1 xZAR will always equal R1. “The xZAR is an open token, based on Ethereum, so anyone can use it to trade and any exchange can offer it as an option.”
However, the stability of the currency opens up opportunities that other crypto-currencies are less likely to take advantage of.
De Sousa explains that one of the key use cases for Stablecoins, such as xZAR, is the ability to use it as a payment mechanism. “You still get all the benefits of quick, easy and secure transactions, but there is no risk to the merchant that a fluctuation in the exchange rate between the crypto-currency and the rand will leave them out of pocket. Consumers can also use it as a simple way to send money to a friend or family member without having to go through a traditional bank.”
Finding opportunities in decentralised exchanges
Another opportunity that Stablecoins offer is an entry point into the new decentralised exchanges. “While centralised exchanges offer many benefits, decentralised exchanges allow a much greater degree of freedom in terms of how a trader makes use of their funds,” he says. “Not only do they have the ability to access a much greater number of crypto-currencies, but they can invest in new and emerging crypto assets such as distributed finance offerings.”
Moving crypto assets onto decentralised exchanges gives investors greater control over their crypto-currency holdings. For those people who like their privacy, the absence of know your customer regulations on these platforms is a real differentiator.
The third opportunity that Stablecoins like xZAR offer investors is the ability to take advantage of arbitrage to grow their investment. Arbitrage relies on the ability to take advantage of different exchange rates across a variety of exchanges.
“We’ve seen that there’s an opportunity that presents itself through the relative independence of the various exchanges. It’s possible to spot an exchange rate differential take advantage of it. This is something that has always been the realm of professional traders, but the combination of distributed exchanges and xZAR allows almost anyone to take advantage of this opportunity.”
He points out that while it’s possible to use most crypto-currencies to benefit from these opportunities, xZAR enables South Africa’s to measure their performance against a set currency. “With the fluctuations in many of the other crypto-currencies, it can often be difficult to keep track of the performance of your investment strategies. However, with xZAR, benchmarking performance is much simpler as it’s using the same foundation as all other local investments.”
Whether it’s the need to send money across the country, pay a tradesman or explore the investment opportunities that crypto-currencies offer, xZAR offers almost anyone the ability to accept crypto-currencies for goods and services without having to be concerned about the dangers that volatility brings to the table. As with other Stablecoins, one xZAR is always R1, whatever you choose to do with it.