Major CEX Wants An Inflation-Tracking Stablecoin On New Layer-2 Platform

Despite a recent scuffle with the U.S. Securities and Exchange Commission (SEC), Coinbase, the American publicly traded company that operates one of the world's largest centralized cryptocurrency exchange platforms, revealed it wanted to see a new inflation-pegged stablecoin developed on its Base platform.

Coinbase, in a new post about building on its recently launched Ethereum-based layer-2 solution Base, is requesting developers to create one of the products that it wants to incubate - that is a non-fiat pegged crypto token or an inflation-pegged stablecoin it calls Fltcoins.

"We are fascinated by the deep thought we're seeing in decentralized stablecoin design and are particularly interested in 'flatcoins,'" Coinbase said.

The CEX described flatcoins as "stablecoins that track the rate of inflation, enabling users to have stability in purchasing power while also having resiliency from the economic uncertainty caused by the legacy financial system."

Following the catastrophic collapse of three major banks in the U.S. over the past weeks, which threatened the stability of the country's financial system, Coinbase believes the creation of flatcoins has become "more important than ever."

Unlike stablecoins which are pegged against fiat currencies like the U.S. dollar, flatcoins will be pegged to the "price of living" through consumer price index and inflation data monitoring.

The crypto exchange platform, however, said it is also open to other ideas that "fill the space between fiat-pegged coins and volatile crypto assets," noting that "these explorations are more important than ever" considering "the recent challenges in our global banking system."

A few days ago, Brian Armstrong, the co-founder and current CEO of Coinbase, confirmed that the company received a Wells notice from the SEC, which centers on its staking and asset listing and noted that they are prepared to appear before the court to defend its name and reputation, saying, "we are right on the law, confident in the facts."

Armstrong further said that Coinbase is "proud to stand up for our customers and the industry in these moments," adding that "the legal process will provide an open and public forum before an unbiased body where we will be able to make clear for all to see that the SEC simply has not been fair, reasonable, or even demonstrated a seriousness of purpose when it comes to its engagement."

The recent post from Coinbase aligned with Armstrong's previous statement, assuring its customers and clients that while the platform is under scrutiny by the financial regulator, it will keep on building the "most trusted products and services" to "update the financial system" and create "more economic freedom in the world."