If there’s the thing that crypto investors want (other than $20k BTC) it’s mass adoption. Cryptocurrency and blockchain have a world of potential but it might not look like what a lot of crypto enthusiasts analysts may have thought that it would have.
Big institutions are flooding into the market nowadays but it hasn’t really had an impact on mainstream adoption.
Not yet anyway…
Granted, Bitcoin has been facing a few scalability issues these past few years as web apps for Ethereum and other blockchains are continuously being developed, the technology that fuels these networks haven’t been able to match the speed and user-friendliness that Fiat-powered, centralised apps have.
But even so, there is one part of the crypto space that is ‘booming’, stablecoins.
Stablecoins are cryptocurrencies that have a stable value (hence the name) and is usually pegged to fiat currencies and other real-life assets like the US dollar.
The stablecoin space is growing at an alarming rate and as more stablecoins rise, competition between them becomes a bit more intense.
Stan Stalnaker, Founding Director of Hub Culture has said:
“Generally the explosion of stablecoins reflects a competitive scramble, and generally more activity in the market is a good thing.”
He added that this activity is likely to continue:
“The reality is that soon most banks are likely to have a stable of stablecoins in the market as tokenization and blockchains make it possible to issue value into the market.”
On top of this, it seems that big institutions are starting to see the benefits of building their own stablecoin. Facebook being one of the biggest of these institutions.
The Principle Consultant at Rocky Mountain Technical Company, Jeffrey Stollman:
“Even if they back their coins 1:1 with the asset that the coin is tied to, they can receive interest on overnight loans of their collateral. The more coins that they mint, the more collateral they have to lend, and the more money they make.”
Speaking on Facebook’s new venture into crypto, he said:
“Facebook’s stablecoin has some potential to become a dominant stablecoin if they are able to excite their huge user base into using it… But just because Facebook has a large user base does not mean that they will all begin using their stablecoin.”
Finishing off Stollman said:
“Stablecoins are the key to any viable transition from cash to crypto,” he said. In a way, they offer the best of both worlds: “while many zealots decry the fact that stablecoins are tied to a sovereign currency, this is the main benefit.”
Original Post: Are Stablecoins the Key to Mainstream Adoption?