Wondering about the risks involved in using stablecoins? We’ll try to make it as simple as possible to understand, here we go!
Exchange rate (FX)
Funds are held in USDC a stablecoin tracking USD. There is currently no exchange rate mitigation so you will be exposed to movements between USD/AUD.
Depegging
The stablecoin we use is backed by cash and short-dated U.S. government obligations: even with this backing depegging can still occur.
Market volatility
Stablecoins can be affected by change in global market conditions.
Digital attack
It’s possible that someone could exploit vulnerability in the code of a stablecoin.
Custodial
We use third party providers to secure our systems and processes (including Fireblocks as a custodial partner).
Technology
Internally we could have issues with our infrastructure that may prevent access to your balance.
Taxation
Using stablecoins raises taxation issues and you should prepare to discuss this with a qualified professional.
Regulatory
The classification of stablecoins is unclear in many countries and it’s difficult to predict how regulatory bodies will react to new technology.
Digital dollars are becoming an increasingly common alternative to traditional fiat currencies. If you’re interested explore more of our content (or join the waitlist below).
