How zMorgan solves the problem of securing stablecoins

Recently, the US authorities have once again revisited the issue of stablecoin regulation. Legislators intend to impose tighter restrictions on the use of stablecoins. As it turns out, most circulating USDT is not backed by real collateral. Zam.io, on the other hand, has launched its own protocol that enables the issuance of stablecoins supported by real collateral. In the section below, we will discuss how it is possible to become a stablecoin issuer and why it is important in the contemporary economy.

Stablecoins for Shares: How zMorgan Works

Last year, the New York prosecutor’s office investigated Tether, the issuer of the most popular stablecoin, and found out that more than half of the coins it had issued were not supported by real collateral. The company’s lawyers had for a long time denied accusations, trying to convince law enforcement officers of the opposite. They even provided questionable analytical reports, which allegedly proved that all issued USDT coins were secured by US dollars, stocks, and bills of exchange. Later, however, Tether representatives gave in and reached a settlement with the New York attorney general, paying a multimillion-dollar fine over misleading claims. Following this precedent, stablecoin collateralization discussions became quite relevant. The crypto community became more vocal about the topic, bringing it to the table more often.

“The reaction of the authorities is quite understandable because most existing stablecoins are inherently dummy coins. They are not supported by real collateral, and if anything happens, users will be the first to suffer the repercussions of the issuers’ actions. We have been studying this problem for a long time and we have developed a fully effective and comprehensible mechanism for issuing collateralized stablecoins,” explains Zam.io founder Georgy Gus.

The zMorgan protocol can be the solution to the problem of securing stablecoins. zMorgan can actually transfer stock capital into cryptocurrencies. But, how does it work in practice?

“Let’s assume you have stocks in companies that are listed on the NASDAQ stock exchange such as Tesla, Apple, Microsoft or other stocks. You decide you want to invest some of your equity capital in cryptocurrencies, as their values are currently growing. To do this, you do not have to sell your securities at all. To transfer capital into cryptocurrencies, it is enough to use our zMorgan protocol,” says Georgy Gus.

In fact, the user sends his shares to a special depository created by Zam.io. Then, zMorgan issues a certain number of stablecoins USDZ (pegged to the US dollar) and AEDZ (pegged to the Emirati dirham). The shares the user had previously contributed would then act as collateral.

“This way we can guarantee that every coin issued is fully secured by real collateral. Most importantly, the user can willingly choose to revert the process and retrieve his shares. In that case, the user must return the stablecoins to the company and pay a commission fee for using the protocol,” commented Georgy Gus.

Users can employ the stablecoins they’ve received to purchase other cryptocurrencies through exchanges. This thereby facilitates crypto investing.

Stablecoins in investment portfolios

Stablecoins, which are less volatile than traditional cryptocurrencies, can always be found in the investment portfolios of crypto investors. During market fluctuations, stablecoins can be used to stabilize profits as their values are pegged to the values of certain fiat currencies. Zam.io has incorporated stablecoins backed by real collateral into its “Intelligent Investment Portfolios”.

“We’ve created a ready-made solution for investors – investment portfolios compiled by our analysts and adjusted depending on market conditions. Each portfolio includes over 10 cryptocurrencies and stablecoins, which serve as hedging assets,” says Georgy Gus.

Investors no longer need to thoroughly track market changes and do an in depth analysis on every coin. They can simply adopt a ready-made portfolio and receive dividends from the first month onwards.

“The portfolio is not static. Users can change the composition of the portfolio at their own discretion. Our specialists may also reconfigure the portfolio, depending on their market observations and the analysis of the assets in the portfolio,” added the founder of Zam.io.

Conclusion

The zMorgan Protocol can indeed be the global solution that addresses the problem of stablecoin collateralization. Using a unique methodology, companies can issue stablecoins backed by their own shares. This will be instrumental in accelerating cryptocurrency adoption worldwide and popularizing stablecoins as a means of payment and investment.