Reserve Rights (RSR) gains 300% as stablecoins gain regulatory approval
Non-fungible tokens and high-yielding decentralized finance platforms have been the focus of attention in the cryptocurrency sector for the past few months. This intense focus on NFTs, DeFi and Bitcoin’s price action means that some investors have glossed over the fact that it was a series of positive developments in stablecoins that helped kick off the 2021 bull market.
One project that has quietly amassed significant gains this year is Reserve Rights (RSR), a dual-token stablecoin platform where all the tokens are backed by a basket of smart contract-managed cryptocurrencies.
Data from Cointelegraph Markets and TradingView shows that RSR has increased by more than 320% since Jan. 1, going from $0.0196 to a new all-time high of $0.829 on March 8 as the project prepares to expand its services to new regions.
Three reasons for the strong growth RSR has seen in 2021 are the global adoption of stablecoins as a viable payment medium, worsening global financial conditions leading to hyperinflation in the countries where Reserve Rights focuses its operations and optimism surrounding RSR’s mainnet launch and several major upcoming developments.
Stablecoins get the stamp of approval
On January 4 the United States Treasury’s Office of the Comptroller of the Currency announced that banks would be allowed to run independent nodes for distributed ledger networks and transact in stablecoins.
Since the approval, stablecoin projects like Reserve Rights, MakerDAO (MKR), Terra (Luna) and Curve DAO (CRV) have all experienced an influx of trading volume as regulatory concerns decreased.
Hyperinflation creates a real-world use case
A second major driver in the recent growth of RSR is the worsening financial conditions in countries that are dealing with hyperinflation. Typically, capital controls are instituted in places dealing with uncontrolled hyperinflation but this does not deter citizens from attempting to store their savings in more stable assets.
One of the first countries where Reserve Rights focused their early growth is Venezuela, which has seen its local Bolivar currency rapidly lose its purchasing power in recent years.
According to the team, users in Venezuela can now utilize the Reserve app as a way to maintain transfer their wealth to a more stable currency such as the U.S. dollar and transact with it as needed.
With the Reserve app, you can deposit your Bolivars and in two minutes, they become US dollars.
You can pay with them easily and freely.
You can move them to a US bank account.
You can save them, without devaluation. (Well in a relative sense. Brrrrr and so on, but still.)
— Reserve (@reserveprotocol) February 27, 2021
Since announcing that the Reserve app would open to every Venezuelan on the waitlist, RSR has steadily increased and its user base has grown.
Argentina, Colombia and Panama are also enduring economic toil and hyperinflation, meaning there is no shortage of users who would benefit from having access to the platform.
Rumors of enterprise-level adoption boost RSR price
There are several high-profile developments that have yet to materialize but they appear to have still had a positive impact on RSR price.
Multiple connections between PayPal and members of the Reserve team have long been the source of rumors about a future integration with the payments giant. Plans for a PayPal integration were recently acknowledged by the RSR team but the exact details have yet to be made public.
Investors also appear to be excited about the upcoming Reserve protocol mainnet launch which co-founder Nevin Freeman said is planned for an unspecified date in 2021.
According to data from Cointelegraph Markets Pro, market conditions for RSR have been favorable for some time.
The VORTECS™ score, exclusive to Cointelegraph, is an algorithmic comparison of historic and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.
As seen in the chart above, the VORTECS™ score for RSR originally began to pick up on March 2, when it registered a 65 prior to a brief spike in price on March 3. Following the price spike and subsequent retrace, the VORTECS™ score turned green for RSR on March 4 before reaching a peak of 70 on March 6. This was roughly 7 hours before the price surged by 45% over the next two days.
The global economic outlook has brightened since the development of multiple COVID-19 vaccines but there are still numerous challenges to overcome and hyperinflation and recessions are just a few. Analysts have predicted that stablecoins will continue to gain traction now that are being integrated to traditional finance and viewed a less of a threat by central banks.
This means that Reserve Rights protocol is well-positioned for future growth as it offers its growing user base one of the main use-cases that Bitcoin was originally designed for, banking the unbanked.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.
