Basis stablecoin may close for regulatory reasons

Crypto News

The stablecoin that has attracted the attention of major investors around the world, Basis , has announced its imminent closure. This virtual currency associated with a physical asset has raised $ 133 million from several venture capital firms.

The Basis interests several big names

Initial Coin Offering ( ICO ) from Basis has been successful. The stablecoin also received capital from capital risk giants like Bain Capital Ventures, Andreessen Horowitz and Google Ventures.

Digital Currency Group (DCG) has invested in Grayscale, which holds nearly 1% of all outstanding bitcoins worldwide, as well as its investment in Coindesk.

However, the big investors in the world of finance will close their doors and Basis will have to return the funds collected.

A report from The Block media reads: “We do not know exactly which regulator is pushing Basis. Regulators denounce the business model of the company and its ICO. “

A revolutionary stablecoin

Basis was created for a  complex ” algorithmic central bank ” based on Blockchain to control it. Therefore, it is not backed by a fiduciary currency.

It tends to remedy the weaknesses of the Tether, which currently lacks transparency and banking partner while investors have difficulty in trusting him.

The Basis algorithm maintains the 1: 1 ratio with the US dollar. It can decrease and increase its offer despite the volatility of prices in the market.

The developer team explained:

“The Basis is designed to maintain price stability by adjusting the supply algorithmically. As demand increases, the Blockchain creates more digital tokens. The expanded offer is designed to lower the price of Basis. When demand drops, Blockchain buys Basis. Contractual supply is designed to restore the price of Basis. “

Unfortunately, regulatory hurdles risk reducing its resistance to censorship and liquidity. The project suddenly ends without being able to demonstrate its value.

What do you think of the stablecoin Basis closing its doors? Give us your opinion in the comments section below.

Facebook Comments