Coinbase, Peter Thiel Back New 'Reserve' Stablecoin

Backed by Coinbase and Peter Thiel, Reserve stablecoin is the latest addition to the digital asset marketplace.

Based in San Fransisco, Reserve stablecoin raised $5 million in its seed round from over 40 funds and angel investors, including PayPal founder Peter Thiel, Coinbase Exchange, GSR.IO and Distributed Global.

Unlike Tether and TrueUSD, Reserve uses a fully decentralized, future growth-backed stablecoin model to achieve a 1:1 parity with the US Dollar.

The Reserve protocol will be open source at launch and use a smart contract called Vault to securely store its cryptocurrency collateral.

"If a future growth-backed stablecoin does reach this state of stable equilibrium, it has the benefit of being totally decentralized and thus censorship resistant."

Reserve must maintain collateral balances at two to three times the parity value to compensate for future price variation.

With current cryptocurrencies being too volatile for use in daily transactions, many believe the introduction of a successful stablecoin will be the beginning of mass adoption.

Several stablecoins are competing to overtake the controversial Tether and become the leading stablecoin for global frictionless value exchange, everyday payments, and more.

Seattle-based Stably raised $500k in early April 2018 and uses a centralized stablecoin model backed by a fiat reserve to maintain its "Organic price stability."

In mid-May, Circle raised $110 million in seed funding from Chinese mining giant Bitmain and others to develop its own Circle USDC stablecoin set to launch this summer.