Michael Egorov, the founder and CEO of Curve Finance has confirmed that its Automated Market Maker (AMM) will be launching a stablecoin.
However, the CEO did not reveal much details about the stablecoin. He only stated that it would be an overcollateralized stablecoin.
Curve Finance To Release A Stablecoin
Michael Egorov, Curve Finance’s CEO, has acknowledged the plan to issue a stablecoin. The CEO announced the project at a 2022 event, REDeFINE Tomorrow.
Additionally, he made some other announcements about the stablecoin. At the event, Egorov was having a discussion with Kelvin Koh, an executive at The Spartan Group.
Koh asked Egorov about the long-term goals of AMM. Egorov replied by saying that the platform needs stablecoins. Afterward, the Curve CEO noted that his company would be introducing a stablecoin soon.
According to the entrepreneur, the stablecoin will be well collateralized. Highly collateralized stablecoins have generated much attention recently.
Regulators and executives have cited how important it is for collateral to back stablecoins. The crash of the TerraUSD stablecoin had brought the issue of collateralization to light.
In addition, analysts believe collateral can provide safety against volatility. Presently, Curve Finance is among the popular AMMs. Therefore, issuing a stablecoin would help to boost its strength.
Besides, the DeFi lender, Aave, recently announced its intention to issue a GHO stablecoin. Unfortunately, only little is known of the Curve stablecoin.
The Issue Of Regulation In The DeFi Sector
Curve Finance might mint the stablecoin against the positions of the liquidity providers. This could provide liquidity benefits for investors.
Furthermore, Egorov briefly discussed the issue of regulation in the DeFi and CeFi sectors. In recent months, the control of the DeFi sector has become a major topic due to current events.
Globally, regulators are working to regulate stablecoins following the crash of TerraUSD. The Curve founder stated that:
” It is uncertain if regulators would tighten the regulations on the DeFi and CeFi sector. Besides, I doubt if regulators can differentiate between both of them. However, it would be beneficial for these platforms 5o communicate clear messages.”
Furthermore, lawmakers regard the DeFi sector as a risky industry. However, they acknowledge that it has immense benefits to the financial system.
Meanwhile, stablecoins have caused major concerns globally. Several regulatory agencies are now moving to regulate the sector and its activities.
Legislators in the US are getting closer to regulating stablecoins, while G20 countries are also working on regulations.