Johannesburg, 27 Sep 2021
Before the advent of stablecoins, crypto-traders turned to Bitcoin (BTC) as their ‘quote currency’. BTC’s volatility, however, proved undesirable for professional traders. The only other alternative was to link up one's bank account to exchanges and trade fiat-to-crypto. Slow wire transfers and high fees were a persistent issue. Today, thanks to stablecoins, traders have the ability to move in and out crypto using fiat currency in tokenised form. OVEX has now added a new stablecoin to its highly liquid exchange, USDC.
Crypto OTC desks, like the one at OVEX, use stablecoins for three main reasons: as trading capital; as a quote currency; and as a counter-party settlement instrument. In the past, OVEX reserved USDC trades for its OTC clients only. Now it is available to all OVEX exchange users! Empowering small volume traders to leverage the power of OVEX’s deep liquidity at the simple click of a button.
Click here to buy and sell USD Coin on OVEX today.
Because USDC is tethered 1:1 to the US Dollar; it has proven popular amongst South African crypto arbitrageurs. According to head of trading at OVEX, Tom Masojada, a substantial amount of clients trading volume through the OVEX OTC Desk are changing hands with USDC to profit off the crypto arbitrage premium:
“OVEX clients can now sell USDC directly for Rands at the same local premium that Bitcoin trades at - with tight spreads and zero fees. We specialise in best pricing on high volume trades”
This is a game changer. Pre-OVEX this process proved costly and time-consuming:
One would buy USDC with Dollars. This USDC was then sent to an offshore crypto exchange and used to buy Bitcoin. This Bitcoin was then sent to a local exchange, like Luno, and sold for Rands at a profit. Add volume to the mix and executing a trade of this nature becomes even more complicated.
With OVEX you can sell USDC, at volume, directly for Rands through their OTC Desk
What exactly is USD Coin (USDC)?
USDC is one of the world’s fastest-growing, regulated dollar-digital stablecoins – issued by payments behemoth, Circle. At the time of writing there are 29.4billion fully collateralised USDC in circulation. Hundreds of companies support the USDC standard, including: digital wallets, exchanges, DeFi protocols, savings, lending and payment services.
What are USD stablecoins like USDC used for?
Stablecoins enable investors to generate yield on their crypto assets in the decentralised finance (DeFi) space while simultaneously alleviating the adverse effects of market volatility. This is precisely why OVEX offers crypto-currency interest accounts, where you can safely store your USDC and generate an impressive 9% annualised yield. This approach is popular for investors looking for superior yield than that offered in traditional fixed-interest investments (such as savings accounts, money market funds or bonds). Many seasoned crypto-currency investors ‘park’ their crypto-currency profits in high-yielding, low-risk USD stablecoin protocols of this nature.
Click here to open up a crypto interest account at OVEX and start earning a passive income today.
In general, stablecoins like USDC are used to:
- Reduce crypto exposure without ever fully cashing out;
- Monetise DeFi and generate yields unmatched in traditional finance;
- Avoid traditional financial instruments and intermediaries;
- Hedge against hyperinflation (especially for people living in countries like Venezuela or Turkey);
- Send money instantly, globally, securely and at low cost; and
- Purchase items in various crypto dApps, exchanges and blockchain-based games.
Wealth managers have turned to USDC as a hedge against rand volatility. Especially in the wake of Chinese property developer, Evergrande’s imminent debt crisis. Last week, MSCI’s index of Emerging Market currencies fell 1.44% to hit a three-week low, with the rand’s 1.52% drop to 14.795 leading the pack. The spill-over effect this crisis will have in emerging markets, like South Africa, have investors concerned about future rand stability.
Click here to buy and sell USD Coin with your South African rands.
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