The rising popularity of stablecoins has often been highlighted as an indication of the growing adoption of blockchain technology. With projects such as Facebook’s Project Libra and JPMorgan’s JPMCoin, it is clear that even large corporations from beyond the blockchain space are seeking to partake in this growing trend.
fiat backed stablecoins do not make much sense. They cannot live to the promise cryptos were actually built for. They are dependent of fiats. I believe, algorithmic and commodity-backed stablecoins will survive in the long run.
Fiat stablecoins don’t have to live to the promise of crypto nor they have anything to do with it. It’s the blockchain technology that allows digital money to move faster, cheaper, and solve actual non-cryptocurrency use cases such as cross-border money transfers for migrant workers or online payments for e-commerce merchants. The average cost of cross-border remittance is 7% and the poorest people pay the most of it. Fiat stablecoins can solve this and many other problems. Let’s leave crypto to the 1% of people who gets it.
Indeed, they reduce the cost of cross border payments. I do not deny that. But what do you suggest when the dollar falls? I’m sure you’ve heard or read of the next financial crisis. What happens then?
Not all cross-border and especially domestic payments are made with USD. There are direct transfer pairs between SAR, AED, PHP, CNY, IDR, INR, EUR, etc. Banks have to conduct their transfers thru USD on a backend, but actually with fiat stablecoin tech it’s possible to offer direct pair transfers. That’s one of the advantages of the tech. However, speaking of the dollar, I’d point out that there are tons of other much weaker currencies that USD. If green buck collapses, then technology along with fiat stablecoins will be the least of anyone’s concern
Stablecoins are highly valuable for the crypto industry from the “adoption of cryptos” POV.
And in a time when fiat to crypto transactions are banned under several legislation, stablecoins are the best alternative to keep the money in standby when not trading.
As far as the future is concerned, they would play an important role in banking and finance. They literally would mean a world to those who pay anywhere between 5% to 15% in transaction fees to banks for sending money to their family in their home land.