Saga Monetary Solutions, a UK-based blockchain company, has come up with a daring plan to launch a stable digital currency (stablecoin) called Saga token (SGA) which will allow users to store and transfer their digital coins across borders with minimal restrictions.
By design, the Saga tokens will be pegged to traditional currencies. These include the U.S. dollar, Chinese yuan, Japanese yen, the euro and the British pound. However, unlike Facebook’s Libra, the SGA tokens will be backed by hard-valued bank deposits using the same range of currencies that back the International Monetary Fund’s special drawing rights (SDR).
Advising the company is a famous Nobel laureate and a top economist, Myron Scholes. His role in the advisory board is to guide Saga to build up a regulatory-friendly framework for the new cryptocurrency which will make it acceptable around the world. In essence, SGA tokens will play the same role as central bank national currencies do but at a global state.
The UK-based firm has also declared that the new scheme for the digital currency is not going to be for profit. In fact, Saga will only be acting as an issuer of the token which will be listed on Liquid crypto exchange.
According to Ido Sadeh Man, the founder & chairman of the board at Saga, the company does not plan to take all three roles: the issuer and the payments layer and the custodian. Rather, the aim is on preparing a virtual currency with has a strong legal framework, which can be used globally without hurdles. In this regard, Man says that they “will increasingly liaise with partnerships in the realms of custodianship and of payments.”
Stablecoin Attempting to Comply with Regulators
By using smart contracts, Saga hopes to ensure the stability of the cryptocurrency. However, a key challenge facing the new currency is the absence of regulation which can prevent it from entering into many major countries of the world including the U.S.
Man hints that the U.S. is not even a target country for the company right now. Rather, they are focusing on those regions of the world where it can be guaranteed that SGA tokens are functioning under complete compliance with the regulatory bodies.
Saga has certainly embarked on an ambitious mission which directly challenges the tech giant Facebook which has thus far been mostly unsuccessful in winning the approval of regulatory authorities in the U.S. Saga seemingly has learnt from it and built up on the failures of Libra by realizing the importance of siding with the governments and financial watchdogs to operationalize its cryptocurrency on a global level.
