Seed CX, a digital currency exchange platform that seeks to attract and accommodate institutional investors, will soon offer trading in three cryptocurrency tokens pegged to the United States dollar. The Chicago-based exchange is getting ready to welcome Paxos, TrueUSD and USD Coin, three tokens that fall under the category of stablecoins; the respective symbols for these digital currencies will be PAX, TUSD and USDC.
Starting on May 17, Seed CX will offer currency exchange services for the aforementioned stablecoins, which will be paired with major crypto tokens as well as fiat currencies such as the euro later this year. Trading stablecoins is something that other exchanges have mostly stayed away from because of the very nature of these tokens, which tend to mirror the foreign exchange currency value of the American dollar as much as possible. Seed CX believes that offering greater options to investors is key to the growth of the exchange platform; moreover, many existing clients had already requested access to these stablecoins.
Since the value of stablecoins will always hover around $1, some active traders may flock to them because they present an alternative to more traditional cryptocurrency/fiat pairs such as BTC/USD. Competing exchange platform Binance, for example, offers currency pairs such as Bitcoin/Tether, which trades under the BTC/USDT symbol. As can be imagined, offering greater variety of currency pairs is similar to a retail stock brokerage offering a mix of instruments such as bonds, futures contracts, forex, and options; the goal is to increase trading activity through investment diversity.
The leading stablecoin, Tether, enjoyed a market capitalization of $2,806,696,188 in May 2019. and its stability was reflected by its exchange rate of $0,993918. While there have been reports of Tether trading volume being higher than Bitcoin on some days, they have been unconfirmed.
Earlier this year, Seed CX was voted as the best exchange platform for digital currencies by the FinTech Breakthrough Awards. The long-term plan for the company is to obtain the required licensing and approval from finance regulators so that it can operate as an exchange for institutional investors. Once the company obtains regulatory approval, access to digital commodities and securities will be offered to institutional investors along with custodial services for digital assets.