The more things change, the . Innovation may bring new tech to forefront, but creative solutions can nonetheless be . more they stay the same based on age-old practices Cryptocurrencies designate ownership of funds via private keys: software code that are crucial in . But written cyphers that grant financial control are similar to Micronesian stone money. For centuries, inhabitants of western Pacific island of Yap used disc-shape stones to record transactions and transfer ownership (of various assets) the stone disc. design of programmable monies without physically moving Rai stones, you could say, were : As long as villagers were of transaction, the asset-transfer became valid. A concept familiar to blockchain miners. primitive form of distributed ledger aware (The story continues below.) Photo credit: Wikipedia The Yapese used rai stones for recording transactions. The disc-shaped stones may be primitive form of distributed ledger. As long as villagers were aware of transaction, the asset-transfer was considered valid. What are Stablecoins? “Stablecoins are that are pegged 1:1 to U.S. dollar or other fiat currency. You could say these are ,” , CEO of Stably, tells Hacker Noon. is Seattle-based stablecoin venture. blockchain-powered tokens digitized dollars Kory Hoang Stably “In our case, StableUSD backs every USDS token with U.S. dollars that are held in escrow accounts, and these are managed by regulated trustee. The advantages [to stablecoins] are that consumers, merchants, and investors can from cryptos’ well-chronicled volatility while being able to make ,” says Hoang. protect themselves frictionless cross-border payments There can be much impact depending on where you live. For tech-forward Americans and Europeans, it’s all about . convenience and mitigating risk But in like Venezuela, Turkey, and Argentina, the pegged tokens can rescue people from financial abyss. For example, Venezuela is undergoing dollarization, which means locals no longer use near-worthless bolivars — no matter what the Maduro regime says. Instead Venezuelans now use U.S. dollars (hence the term “dollarization”) and cryptos (such as Bitcoin, Dash, and stablecoins) to make purchases, as well as, to . inflationary economies preserve purchasing power “We increase adoption by making it as easy and cheap as possible for people to use and convert stablecoins,” says Hoang. “The disruption is creating an for transferring and settling funds.” efficient global infrastructure (The story continues below.) Photo credit: Shutterstock Global banks such as JPMorgan, HSBC, Bank of America, Citigroup, Barclays, Capital One, and others are experimenting with blockchain and tokenization to save costs, increase settlement speed, and improve customer experience. Heavily Regulated Industry Banks and credit card companies process $14 trillion worth of transactions per day, which leads to for consumers, merchants, and investors. It’s also to move, audit, and settle such quantity of money through countless jurisdictions. enormous cumulative fees costly for banks In February, London-based banking giant HSBC reported that it’s achieving from foreign exchange (forex) trading . The bank processes between 3,500 to 5,000 trades daily worth $350 billion. 25% savings using blockchain “Being cheap and frictionless are key advantages but innovations around stablecoins aren’t just about tokenizing fiats like U.S. dollar or Euro,” says Stably CEO Kory Hoang. “Blockchain ventures are tokenizing commodity-monies, too. These include precious metals, diamonds, fossil fuels, and other bartered assets whose prices are less volatile [than cryptocurrencies]. In our case, we’re developing a meta-stablecoin that comprises a basket of different stablecoins. This will allow people to and .” reduce their exposure diversify risk (The story continues below.) Photo credit: Shutterstock Physical cash, gold, fiat coins, and other commodity-monies are expensive to transport, secure, store, monitor, and trade. Thus, blockchain-powered tokenization is promising disruption which aims to digitize real-world assets. It could also bring new era of barter economies worldwide. Inefficiencies of Physical Currencies It’s estimated that 3–4% of fiat currency globally are in physical form (cash and coins) while the rest are in electronic format. Physical cash (like physical gold) are — costing U.S. companies upwards of $6 billion a year to operate via ATMs, armored trucks, security personnel, 24/7 cameras, cash-counting machines, and other . expensive to transport, store, and secure security-intensive infrastructure Economic need for is as timeless as ancient Rome’s denarius coins. Emperors debased the denarius by removing its silver contents, which eventually led to coin’s worthlessness. Thus, Roman citizens and merchants switched to reliable forms of money such as (price-steady) gold, silver, and other commodities to settle transactions. reliable mediums of exchange Man has used commodity-monies for thousands of years. Our ancestors traded goat’s milk for fish; corn for fruits; and cattle for silver. Tradeable goods are acquiring modern features — digitization — but underlying assets and their fulfill the marketplace’s need for mediums of exchange and store of value. price-stable characteristics reliable As they say, “The more things change …”

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