however, regulators have not been keen to take aim on algorithmic stablecoins, which are governed by automated expansion and contraction of the monetary supply. In an exclusive interview with Cointelegraph, Sam Kazemian, the co-founder of the Frax stablecoin protocol, discussed the regulatory outlook for the sector and algorithmic stablecoins in detail.

however, regulators have not been keen to take aim on algorithmic stablecoins, which are governed by automated expansion and contraction of the monetary supply. In an exclusive interview with Cointelegraph, Sam Kazemian, the co-founder of the Frax stablecoin protocol, discussed the regulatory outlook for the sector and algorithmic stablecoins in detail.

Stablecoins, or crypto assets which peg their value to less volatile fiat money, are useful tools for a variety of reasons. They can be used to cash out crypto investments, send or receive stable money abroad, and to pay for everyday consumer transactions without fear of fluctuation. A recent estimate from the Bank for International Settlements, or BIS, put the total stablecoin supply at roughly $150 billion. But central banks, the issuers of traditional fiat money around the globe, do not se...

Stablecoins, or crypto assets which peg their value to less volatile fiat money, are useful tools for a variety of reasons. They can be used to cash out crypto investments, send or receive stable money abroad, and to pay for everyday consumer transactions without fear of fluctuation. A recent estimate from the Bank for International Settlements, or BIS, put the total stablecoin supply at roughly $150 billion. But central banks, the issuers of traditional fiat money around the globe, do not se...

Growth in cryptocurrency activities | Source: BIS Cointelegraph: There are many algorithmic stablecoins out there, such as Terra USD, Ampleforth, etc. In your opinion, what makes Frax unique? Sam Kazemian: What makes Frax unique is that we have a system where our protocol expands and contracts supply in various places across blockchain protocols, and targets the exchange rates of the Frax stablecoin out in the open market. We like to compare it to a central bank. When it issues a currency, it...

Growth in cryptocurrency activities | Source: BIS Cointelegraph: There are many algorithmic stablecoins out there, such as Terra USD, Ampleforth, etc. In your opinion, what makes Frax unique? Sam Kazemian: What makes Frax unique is that we have a system where our protocol expands and contracts supply in various places across blockchain protocols, and targets the exchange rates of the Frax stablecoin out in the open market. We like to compare it to a central bank. When it issues a currency, it...

If a central bank pegs their currency to gold, what they'll do is look at the price of gold against their national currency. If it's lower than what they want, they'll buy some of the currency back. If the other side is higher than what they want, then they'll print more of the currency. Frax takes this kind of approach. That's how we developed our algorithmic stablecoin thesis, and it's worked well. We've never broken our peg, even during [the major market ...

If a central bank pegs their currency to gold, what they'll do is look at the price of gold against their national currency. If it's lower than what they want, they'll buy some of the currency back. If the other side is higher than what they want, then they'll print more of the currency. Frax takes this kind of approach. That's how we developed our algorithmic stablecoin thesis, and it's worked well. We've never broken our peg, even during [the major market ...