The Swiss non-profit Saga Foundation announced on Thursday that it is developing a new non-anonymous stablecoin with the help of some bigwig advisors.
Namely, the advisory council includes JPMorgan Chase International chairman Jacob Frenkel; Nobel Laureate in Economic Sciences Myron Scholes; financial futures pioneer and CME Chairman Emeritus Leo Melamed; and the co-director of the Initiative for Cryptocurrencies and Smart Contracts, Cornell University Prof. Emin Gun Sirer.
Dubbed Saga or SGA, the coin will be backed by a “variable fractional reserve” pegged to the International Monetary Fund’s special drawing rights (SDR) – an international reserve asset created in 1969 to supplement member countries’ official reserves for the purpose of expanding global trade.
Specifically, the platform will use smart contracts to regulate the market, according to the white paper. These contracts will generate SGA tokens as needed to meet demand, and will also “burn,” or destroy tokens when the price slips.
Notably, users would sell tokens back to the network, not to each other.
Some tokens will be kept in reserve for times when liquidity is hard to come by, but most are expected to be converted to fiat currencies, according to the white paper.
“Therefore,” the company explained in the statement, “the reserve acts as a buffer, limiting the impact of market fluctuations.”
It claims that the system “can set the ground for the currency to become a store of value and a medium of exchange.”