ALTCOINS-Crypto backed by crypto: Dai seeks to change 'stablecoin' game

It's unclear.

Cryptocurrency-backed stablecoins fell outside the scope of a G7 report last month that said their ability to keep a steady value in the medium term was questionable.

U.S. regulators declined to comment on Dai.

Britain's Financial Conduct Authority said it did not use the term "stablecoin," given stability was purely an aspiration, and that a thorough case-by-case analysis was needed.

Stablecoins like Dai present a new front for regulators as they strive to tame the fast-moving world of cryptocurrencies, experts said.

"The regulators are trying to fit the existing framework onto these new technologies," said Phil Angeloff, a lawyer at Clifford Chance in Washington who has worked on stablecoins.

Better than many cryptocurrencies used mainly for speculation.

Oxfam has tested Dai this year for distributing aid in the Pacific island state of Vanuatu, prone to natural disasters. It gave Dai to around 200 people and 30 vendors on one of Vanuatu's 80-plus islands, building a mini Dai-based economy.

"It allows us to control more, and interact economically more directly with each other - and more quickly - after a disaster," said Oxfam's Sandra Hart, speaking from Vanuatu's capital Port Vila.

Another larger version of the trial is planned in Vanuatu next year, Hart said, spread across multiple islands.

Dai is also attracting attention in inflation-hit Argentina.

Data is scarce, but a Telegram messaging group for Dai users in the country has doubled in size to over 450 members in recent weeks, the Maker Foundation's Conti said.

Reuters spoke to five users in cities across the country, who said Dai offered a chance to protect their savings against the peso's falling value.

"My mom and I started to save a part of our money in Dai," said Romina Sejas, a law student in the western city of Mendoza.

"We can't save our money in pesos. Every month we have inflation. We have to be creative to survive to the decisions of our politicians."

Dai's decentralisation made it an attractive alternative to other stablecoins, said Jose Villar, a software program manager in Buenos Aires.

"All others, there is some entity behind that can be a bank, and we don't know who is really behind them."