Alexey Ermakov, the Founder of Aximetria, believes there is significant consumer demand for stablecoins after the volatility crypto experienced in 2018Aximetria
Financial payment service Aximetria has added the option for consumers to carry out mobile transactions in stablecoin. Previously, the firm’s app just allowed consumers to buy, sell and transfer currency in fiat and crypto. The first stablecoin to be made available on Aximetria’s mobile platform is
The company is already considered unique in now offering a mobile banking platform for all three forms of currency but also possesses two other clear advantages.
Firstly, despite offering a decentralized mobile banking platform, Aximetria is not a bank. Therefore, consumers can transfer currency without specific transaction or banking commission charges. The only financial charge is related to Aximetria’s second advantage — in that its transfers occur on the blockchain — with less than $1 commission per transaction. Bricks and mortar banks in the United Kingdom typically charge between $32-39 to transfer a large amount into an account on the same day, for example. The blockchain itself also then lets consumers keep an up-to-date ledger of all their transfers, as well as being more secure, thanks to its automated system of nodes.
Set up by Russian serial entrepreneur Alexey Ermakov, Aximetria is headquartered in Switzerland. Ermakov chose the country after the Swiss regulator, FINMA, became one of the first to introduce initial regulatory framework around cryptocurrencies. As a result, he believed it would be a country that would foster fintech and his henceforth, his company.
Customers can sign up to Aximetria’s mobile banking platform regardless of their nationality of location. In accordance with FINMA regulation, consumers must meet the company’s remote know-your-customer identification service, as well as adhering to national laws, such as on anti-money laundering.
Not all of Aximetria’s service is online though — consumers receive a free MasterCard after signing up. The card allows an individual to transfer currency, whether fiat, crypto or stablecoin on to the card to be spent in their day-to-day lives. For both crypto and stablecoin, the value of one of the coins is calculated by exchanging them at their current market value into the fiat currency of the users’ choice.
Crypto Chaos?
Generally, stablecoins are far less heralded than their crypto compatriots. However, after traditional trader favorites such as Bitcoin and Ethereum experienced heightened volatility in 2018, that could be set to change.
To the delight of crypto enthusiasts, Bitcoin hit a global high of $19,783.06 in December 2017. Its skyrocketing value had been unforeseen, with the same traders even celebrating the fact that one Bitcoin had reached a price of just over $800 one year prior.
But, the Bitcoin bubble didn’t last and by November 2018 its value had plunged 75%, with one unit worth less than $5,000. This decrease was attributed to a range of different factors, from simultaneous massive sell-offs to rumors that giant capital gains taxes would be applied to those selling crypto in the future to the widely reported fact that
While the fluctuations of Bitcoin and other cryptos could be enticing to investors prepared to take a gamble on its recovery this year, the forecast isn’t optimistic. Pascal Thellman, the CEO of BountyOx, a global cryptocurrency bounty hunting platform has said that he expects crypto to continue to ‘bottom-out’ in early 2019 — meaning that it reaches its long-term low price before recovering. His view has been supported by many others working in the crypto industry. Alex Sunnarborg of Tetras Capital agreed that Bitcoin has yet to bottom-out in 2019, while others, such as Vinny Lingham of Multicoin Capital have said its recovery could be far more long-term.
The volatility of crypto is not just damaging to the wallets of investors. At an institutional level, it lends fuel to the fire when banks say crypto is too volatile to be considered a reliable currency. Bitcoin’s fluctuation over the past year has meant that many banks have been put off from dealing in it, believing that it can damage trust held by both consumers and consumers. Much like banks are disinclined to lend or borrow fiat currencies which have unstable values — like the Indonesian Rupiah or the Argentinian Peso — and the same principle applies to crypto.
For example, in January 2019, a group of banks in India began issuing warnings to users stating that they would be shutting down the accounts of those found to have carried out transactions in crypto over volatility concerns. On a practical level, it can also be difficult for banks to manage payments in cryptocurrency due to their fluctuating exchange rate.
On a consumer level, it can also scare off members of the general population from using crypto. Only a minority of firms have so far begun paying their employees in Bitcoin for example, such as TransferB and BitPesa. In a similar vein to banks, firms are worried about fluctuation in value of their employees’ wages. Agreeing to pay someone one Bitcoin in December 2016 would mean something very different to the same contract just one year later.
Constantly having to re-draw and re-evaluate employees’ salaries in line with more stable fiat currency, has led to firms continuing to pay their employees in Dollars or Euros — due to its simplicity. Similarly, employees themselves have been put off from receiving their wages in crypto as any savings in the currency can depreciate so rapidly — Bitcoin being a fine example of this.
Salvatory Stablecoins?
“We want to be able to help people in regions with high inflation or limitations to be able to sell, buy and save in stablecoins which are tied to global traditional currencies, like the Euro and Dollar,” explains Aximetria’s CEO, Alexey Ermakov. “They are good because they have a fixed rate and do not have significant price fluctuations. While they are devoid of the main drawback, with led to disappointment in cryptocurrencies — huge volatility, that is, price volatility.”
Stablecoins can theoretically provide both investors and members of the public alike with a much more reliable alternative to fiat currency than crypto.
Aximetria’s users can convert the value of their stablecoins into fiat to spend via a MasterCardAximetria
Unlike crypto, stablecoins are pegged to either fiat currencies, like the Euro, or the value of commodities like gold or base metals so that their worth doesn’t fluctuate wildly. Algorithms are also used in order to manage the supply and demand of each stablecoin, so that what is currently in circulation is matched by that of the reserve in order to avoid sudden inflation. Gemini — the stablecoin that Aximetria has made available — is tied to the American Dollar, for example.
However, they also maintain the advantages that crypto possesses over fiat currency. These include the increased privacy and security that an autonomous, node-based blockchain-run transfer system provides, as well as instantaneous and cheaper transfers at any point during the day and night.
“Stablecoins do not allow you to get rich overnight, but they retain all the advantages of cryptocurrency,” concludes Ermakov. “The exclusiveness of ownership, the cheapness of transfers and the ability to open a quasi-currency account are all invaluable in 2019.”