Frax (FXS) - $ 3 billion in stablecoins by adviser Donald Trump

Former US President Donald Trump had a changing opinion on cryptocurrencies, as on many other topics. However, this did not prevent the advisor of the eccentric politician from introducing stablecoin Frax, based of course on US dollars. There are already almost 3 billion of them on the market, and the cryptocurrency enters the elite of digital money.

We are continuing the cycle of the Forex Club portal in which we analyze and describe the largest, highest-valued, most interesting, most developing, advanced and also the most controversial cryptocurrency projects around the world. Today it's time for Frax - a stablecoin that has quickly gained a lot of popularity.

What are stablecoins?

Stablecoins are cryptocurrencies without which the modern digital money market is hard to imagine. They constitute a kind of bridge between traditional finance and cryptocurrencies. For two reasons. 

The first is a small - compared to cryptocurrencies - volatility of stablecoin prices. They usually represent the value of a fiat currency. So a USD based stablecoin will always be (roughly) $ 1, a British Pound (GBP) based stablecoin will always be worth £ 1 and so on. 

The second reason is to reduce transaction costs. Stablecoins are a safe haven for capital when investors want, for example, to wait out a market crash. They are also most often used to "switch" from one cryptocurrency to another, especially in the case of less popular ones, which are less common in trading pairs on cryptocurrency exchanges. 

Why do we need another stablecoin?

Well, since stablecoins are and work great, and reflect the value of the American dollar (USD), i.e. Binance USD (BUSD), Tether (USDT) or Terra USD (UST) have existed for a long time, so why another stablecoin on the market?

Stephen moore, former advisor to Donald Trump argued from the beginning that it will be a fully decentralized, but most of all the most stable of cryptocurrencies known as stablecoins.

- Soon central banks will feel competition from private currencies such as Frax. The days of the government's monopoly on the issue of money by central banks will soon come to an end. Currencies are expected to remain valuable, but with some of them plunging sharply and with many countries fighting hyperinflation, we need a global currency of stable value that will benefit consumers, businesses and investors - underlines Stephen Moore, who was also Trump's candidate for the Fed at one time.

How does Frax

Exactly that Moore together with Sam Kazemian (co-founder of Everipedia, a competition for Wikipedia) and Ralph Benko (former Ronald Reagan deputy) created Frax. 

Interestingly, he did not have to invest billions of sums in the project to ensure the stability of the cryptocurrency. It does not work like other stablecoins that are mapped to fiat currencies in a 1: 1 ratio (or at least their managers say they do). 

Frax is based on the so-called fractional reserve, which can be likened to how central banks buy back bonds. Frax, on the other hand, provides loans secured with blockchain technology, ensuring confidentiality to the owners of the currency, and at the same time eliminates the risk resulting, for example, from the bankruptcy of the central bank or even the entire country. This cryptocurrency somewhat protects itself, and the dollar is only a reference to the value in the market. 

- Frax offers the prospect of success wherever other stablecoins have failed. It will allow its users to trade in a currency that they can be sure will remain a stable unit of account and store of value, and transparent and reliable around the world. We create a reliable, safe and stable digital currency designed to make the international financial and monetary system more stable and efficient, changing the world of finance forever - emphasizes Ralph Benko.

FXS cryptocurrency quotes

Stablecoin Frax can currently be traded on 23 cryptocurrency exchanges from around the world. As of March 16, 2022, it is traded at $ 0,99 and there are 2 units in trading, which translates into a market cap of over $ 903 billion. The peak of trading was September 242, 158, when each Frax stablecoin was paid $ 2,9.