Stablecoins emerged years ago, but they did not become a popular part of the crypto industry until 2018. Back then, the bear market that turned into the so-called crypto winter caused people to sell their coins and cash out as soon as possible before their cryptocurrencies lose their value. However, there were many who believed that the market will bounce back eventually, and they were looking for a way to stay within the crypto industry while still maintaining the value of their investment.
Stablecoins emerged as a perfect solution, particularly Tether (USDT) — a dollar-pegged, dollar-backed cryptocurrency whose value is always the same, fixed at $1 per coin. Over the next four years, the stablecoin market exploded, and the industry now has multiple major brands competing for being the top-ranking one.
However, while stablecoins can, theoretically, be backed by any currency or asset of value, most of them go for being backed by the USD. This is why Gyen (GYEN) attracted so much attention, as being the first stablecoin backed by the Japanese yen.
How Does Gyen (GYEN) Work
Gyen is the world’s first regulated Japanese yen-pegged stablecoin, partnered with ZUSD, which is a new digital dollar. The project was created by GMO-Z.com Trust Company (GMO Trust) which believes that blockchain technology is the future of the internet. The project wishes to offer a global payment, money transfer, trading, clearing, and settlement solution that uses blockchain, which is why it created GYEN and ZUSD.
Both are 100% fiat-collateralized, and will only be issued when the corresponding collateralized fiat is placed in custody, with a 3rd-party trustee, according to the project’s white paper. GYEN gets its value from the Japanese yen, while ZUSD, like other popular stablecoins, gets its own value from the US dollar.
Both are redeemable and pegged with the corresponding fiat currency in a 1-to-1 ratio, and their goal is to eliminate volatility while still benefitting from all the advantages that the cryptocurrency industry has to offer.
What Problems Does Gyen (GYEN) Solve?
GYEN is a stablecoin created to solve some of the problems of the financial industry, including traditional and crypto finance alike. It was designed to eliminate volatility, increase trust, and more. In other words, it is not just an empty project that can easily be dismissed. Apart from being the first and currently only yen-backed stablecoin, it deals with:
Volatility
As a stablecoin, GYEN resolves the problem of crypto volatility just like any other stablecoin. Backed by a fiat currency, and with its price pegged to said currency — Japanese yen (JPY), GYEN is a perfect solution for investors who wish to preserve the value of their investment without having to cash out and leave the crypto industry. Furthermore, as yen-backed crypto, it can be purchased with yen directly, and users will not have to calculate the conversion rate like before. Purchasing GYEN with yen will be a lot simpler and more straightforward than buying a dollar-backed stablecoin.
Trust
Next is the issue of trust. Bitcoin, for example, is decentralized and trustless, but trust still plays an important role for centralized digital assets, since their issuers have a major impact on the stablecoin’s operability and underlying systems.
GYEN was issued by GMO Trust, which holds the necessary licenses and registrations to issue and redeem stablecoins lawfully. As such, it is perfectly trustworthy, as the regulators themselves decided as much. Of course, the regulators will have the ability to react if the project ever shows any intention of cheating their users, which puts the project just as trustworthy as any other legitimate financial institution.
Transparency
One of the main criticisms of Tether is the fact that no one is really sure whether the project has enough money to back all of its stablecoins that are released in circulation. GMO Trust saw how much criticism the project received, and it decided that Tether’s way of doing things is not a good example to follow. This is why GYEN, as well as the project’s other stablecoin, ZUSD, will be issued on Ethereum’s blockchain.
As most likely already know, this is a public blockchain where the total amount in circulation can be viewed by anyone. This also solves the problem of transparency in traditional finance, since, in the current banking environment, reserve balances and forex conversion are not exactly easily available to the public.
Oversight and audits
We recently touched upon the fact that GMO Trust is a regulated trust company, which means that it has employed rigorous policies, and it is exposed to strict regulatory oversight. It also had to employ the highest security standards to ensure that its digital assets will be well protected and that there is no manipulation of other forms of shady business of any sort. The company has received regulatory approval, and the same is true for its stablecoins. It also engages in regular third-party audits of its bank accounts, as well as smart contracts. In other words, there is no need to trust this project — all the information regarding the issues of trust are regularly checked and publicly disclosed.
Benefits of Gyen (GYEN)
Gyen does not only solve the existing issues in crypto and traditional finance alike, but it also provides additional benefits that make it worth using it. In that regard, it offers:
Instant Settlements
The stablecoin allows near-instant settlements across its network of settlement networks. The system that it managed to develop is noticeably faster than any counterparty settlement, which is an important feature in this day and age. It used to be that financial transactions — especially international ones — that can be completed in a few days were considered fast. However, with today’s technology, there is no reason to wait for days, when it can be done in less than a second.
Easy storage and transactions
Gyen is built on Ethereum’s network, meaning that it is an ERC-20 token. Like all other ERC-20 tokens, it is compatible with most leading ERC-20 wallets, which means that holders can easily store it in their favorite wallet, and transact it whenever they feel the need.
Seamless trading
Lastly, Gyen stablecoin allows seamless trading across the project’s high-speed global network of partner exchanges, which include the likes of Liquid, Nexus, and even Coinbase.
Bottom Line
GYEN is the world’s first regulated stablecoin that is pegged to and backed by the Japanese yen. It is regularly audited, trustworthy, and meant to be the global solution against volatility and problems encountered by traditional finance, such as expensive and lengthy transaction processing. It is direct, fair, transparent, immutable, and reliable, and definitely worth consideration next time when you decide that you wish to secure your funds without leaving the crypto industry.
