Saga said in a press release that its brand of cryptocurrency is different from volatile blockchain-based currencies like Bitcoin because it resembles central bank-issued money and so would be useful as a more stable asset for storage of value and cross-border exchange.
Saga has developed a system that means a truly global currency can come into existenceaway from national or political tensions.
This acts as a stabilizing mechanism to reduce volatility, Saga said in the release, explaining the rationale of pegging to the SDR.
The SDR was initially defined as equivalent to 0.888671 grams of fine goldwhich, at the time, was also equivalent to one U.S.
The Fund explained that while SDRs are neither a currency nor a claim on the IMF, they act as a potential claim on the freely usable currencies of IMF members and so can be exchanged for these currencies.
The downside of most cryptocurrencies is their extreme volatility, which while attractive to speculators, can constrain their usefulness as a medium of exchange and store of value.
Hyper-volatile currencies, which lack a monetary policy, are usually anonymous, said Saga founder Sadeh Man, according to TechCrunch. Stablecoins are pegged to other assets thus preventing their organic growth and major players in this space are opaque concerning their funds.
The Saga token will initially be traded against the USD, Bitcoin, and Ethereum, while more trading pairs are expected in the future, Liquid said.
Original article