Taiwan-based technology company Green World Fintech Service announced that it is set to launch Taiwanese Dollar-backed stablecoin dubbed Taiwan Digital Token (TWDT). The stablecoin will be based on the Ethereum blockchain network.
Taiwanese Dollar Pegged Cryptocurrency
TWDT will be pegged with the Taiwanese dollar on a one-to-one basis. It can be purchased at retail counters or online
Green World, as mentioned above, plans to counter money laundering through this coin. It will do this by using banks and in-person point of sale terminals. Customers will send the money to a bank account either in person or through a regular bank transfer. After, the identity of a person is established; the tokens will be released into the customer’s wallet which will prevent money laundering.
The company’s press release stated:
“This means that each tradable TWDT-ETH represents an NT$1 (1:1 reserve ratio) in the Trust Bank account, and the system is committed to the total use of TWDT-ETH on the market at any point in time. It is equal to the balance of the trust bank, and the balance of the trust bank account is regularly announced, and professional accountants are accepted for financial visas.”
As promising as this sounds, the company has not announced a date, on which they will be launching the coin. There is no clarity on exchanges that will list the token – either in Taiwan or elsewhere.
TWDT to Combat Money Laundering
As far as the legality of cryptocurrencies in Taiwan goes, currently, the Taiwanese government is taking steps to regulate cryptocurrencies in a bid to prevent money laundering activities. The government plans to draft regulations for the crypto sector by November this year, after which crypto enthusiasts will have a clear picture on the matter.
The government’s announcement came, right after the national banks in the country suggested that Anti-Money Laundering laws (AML) should also cover cryptocurrencies. Even with impending government regulations, Green World Fintech Service claims to have found a solution to downsizing money laundering issues in the country.
It is interesting to note that stablecoins are not always true to their name. For instance, the most famous stablecoin in the cryptocurrency market is Tether which is symbolized by the token name USDT. Tether is said to be equivalent value of $1.
At the time of writing this article, USDT was trading at $1.01. On some occasions, it has also dropped to $0.99, and on other occasions, it has gone up to $1.50.
However, cons aside, stablecoins are perfect for institutional investors who fear to leap to the cryptocurrency market. Since these coins have relatively low volatility, the risk factor on investment is also small.