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Stablecoin Project Basis to Shut Down Due to Regulatory Pressure, After Raising $133 Million

Stablecoins are the new red hot market in crypto space, however for one company things did not go so well. Basis, an “algorithmic central bank” type stablecoin initative, which was injected with a massive $133 million in investments, is reportedly shutting down.

Basis Stablecoin Project

According to sources familiar with the Basis stablecoin project, the company cannot move forward with its plans to launch the Basis currency because US regulatory policies will not allow it. Now, the firm has begun refunding investor money.

As described in news reports, the Basis stablecoin project was based on some of the most advanced mathematics. However, due to a strict regulatory environment in the US, the project reportedly can’t continue.

So Many Coins, What For?

Even as the cryptocurrency market has crashed, there have been creative new projects being launched such as security token offerings (STOs) and of course, stablecoins. There’s Paxos Standard Token (PAX), Gemini Dollar (GUSD), Circle’s (USDC), etc. According to some estimates, there are about 130 stablecoin projects that have now been launched.

But do STOs or stablecoins make sense from an investment point of view? Although there are varying opinions regarding that among “experts”, one good thing about controversial Tether (USDT), the very first stablecoin, is that they’ll usually always be worth about $1. So, holding a stable digital asset can help investors hedge against the volatility in the cryptocurrency market.

Moreover, many of these coins are regulated so that means if an exchange gets hacked, your funds should be safe. Some people tend to like that added security, even if they have to do KYC/AML checks.

Will The Stablecoin Market Really Pick Up?

At this point, it is safe to say that everything in the crypto market is highly unpredictable. Because the market still hasn’t matured, it’s tough to make accurate calls regarding the performance of this new asset class. At this stage in their development, some even consider cryptoassets to still be an intellectual experiment.

Regardless of whether this experiment fails or succeeds, it has provided us all a great learning experience. Hopefully by now, we’ve read about or experienced every type of conceivable scam out there. So it should have made us more careful, and even less greedy after losing all that money to shitcoins and/or fraudulent schemes.

Let me leave you here with some very wise words from two very smart professionals in the crypto space!

Anthony Pompliani, Founder & Manager @ Morgan Creek Digital:

“Bitcoin is unfakeable digital gold that you can instantly teleport from one impenetrable vault to another, opened only using your self-generated password, nobody able to stop your payment, with no registration or intermediary required. There will never be more than 21M bitcoins.”