The Connection Between Crypto And Fiat Is Closer Than You Think

Money has come a long way from dusty ledgers, oversized check-books and waiting in long lines at the bank. In fact, consumers are so frustrated with “Big Banks” failure to innovate that one in three of us believe . traditional banks will cease to exist in 5 years Most people don’t even use physical money anymore. The mobile-payment market has made cash a relic in Asia, with (or roughly 18% of the world’s population). Though mobile payments are growing, there’s something even more revolutionary to the traditional banking sector: 1.4 billion monthly users on China’s two biggest platforms The introduction of cryptocurrency as a real alternative for payment. In South Korea, at thousands of retail outlets, and 30% of the population owns cryptocurrency. In the west, retailers are taking note — as payment. Overstock announced they’re this year, and even accepts coins like Ethereum, Litecoin and Dash. consumers can use crypto to pay brands like Microsoft, Paypal and Expedia accept bitcoin using bitcoin to pay state taxes These innovations don’t provide the final solution to money management, but they’re a step in the right direction. There’s still a And this is where cryptos will need to progress before being considered a viable alternative to fiat. large gap between the facility and security in paying with fiat and the relatively inaccessible forms of payment with volatile cryptocurrencies. But there’s a breed of crypto that helps close this gap, providing a real bridge between fiat and crypto and catering to consumer desire for accessible and secure digital currencies. They’re called stablecoins, and they’re here to ’s reputation, bring user’s finances into the 21st century, and spur mass adoption of cryptocurrencies. bring trust back to crypto Why Stablecoins Are The Solution To Crypto Woes After 2017’s bull run, we’ve seen a “ . And anytime soon. crypto winter,” where speculator’s lost almost half a trillion dollars cryptocurrencies aren’t expected to recover Bitcoin’s volatility (see: the famous example of the , which in 2010 was valued at ~$30, and at the end of 2017: $82,000,000) has staved off full-scale institutional, commercial and popular adoption. 10,000-bitcoin pizza And governments aren’t engaging with the digital currencies as hoped. Just this week South Korea, the world’s largest crypto market, . And the recent scandal at when the sole password holder died, illustrates just how powerless regulators are in this type of centralized exchange. Bitcoin, Ether, Ripple and other brand-name cryptos are failing consumers. But this isn’t happening to all cryptos. maintained its ban on crypto ICOs QuadrigaCX, where users lost $190M We’re seeing growth in stablecoins. The general idea behind a by Nobel Laureate F.A. Hayek. Now, we’re beginning to understand just how they fit in with our institutions. stablecoin was proposed over 40 years ago Considered the “ ” stablecoins are price-stable cryptocurrencies whose market price is collateralized by another stable asset. Holy Grail of Crypto, They’re also regulated, deemed “safer” than other cryptocurrencies. But this is where it gets really interesting: When stablecoins are pegged to a national currency (most are ), they offer . This is traditionally a huge barrier for entry in the crypto market (as illustrated by the prevalence of and ). And beyond just offering a safe-haven for traders, stablecoins provide an avenue for an easy, and cheap, exit from other cryptos. It’s the perfect way to take your crypto profits back to fiat. pegged to the US dollar an easy bridge between fiat and crypto crypto “How To” guides The New York Times’ landing page In many ways, this makes stablecoins like digital national currencies, or DNCs, which are growing popular around the world: Switzerland’s e-franc Sweden’s e-Krona Venezuela’s Petro Marshall Islands’ SOV Japan’s J-Coins Stablecoins provide all the innovations unique to cryptocurrencies — access to a decentralized, immutable ledger on the blockchain, financial inclusion and democratization of currency — all while bringing currency into the 21st century. Stablecoins Have Benefits Other Cryptos Lack Stablecoins are simply the best of both worlds. They provide price-stability against other cryptos and solve some of the lagging issues in banking institutions. It’s no wonder 2019 has been called the year of the stablecoin. Think about it like this: Stablecoins are a technologically-efficient alternative to cash — backed by fiat currency and ensure secure payment systems and models. They provide the framework for peers to trust each other because every transaction is tracked on the decentralized ledger that cannot be altered (read: immutable). And by trading on a decentralized exchange, they allow users to transact peer-to-peer (P2P) in real time — dis-intermediating the “traditional” banking model. There are many benefits of P2P payments. Bypassing the banks will save you a lot of money. And by creating the bridge between fiat money and cryptocurrency, you’ll be able to get your money of the volatile crypto market whenever you want — and can store it in an off-bank network. in and out But this is just the beginning of P2P applications. It solves for crypto’s transaction time issues, allowing instant transfers between trusted parties. And the applications in foreign exchange (forex) are just as important. With stablecoins you can create pairs and exchange currencies directly on a rate you decide, bypassing the initially established in 1973. expensive and old SWIFT system Paired with the acceptance of cryptos in international markets, stablecoins are no longer just a hedging tool. They now have real purchasing power. Blockchain, and the decentralized ledger technology, has arrived in many (if not all) industries. And with declining services and confidence, fintech is in desperate need of innovation. In A World Of Blockchain, Stablecoins Are The Next Step For Digital Currencies Yes, . No, it doesn’t have to be a scary place. the future is now Not only are we seeing the development of DNC projects (the five listed above are just the tip of the iceberg), we now have entire governments finding a home on blockchains, as in the . Digital Republic of e-Estonia Meanwhile in the US, we’re failing to realize the variety of services stablecoins provide. As we’ve seen back to fiat currency, a stablecoin’s utility as bridge, and an “insulator” for crypto assets is not being taken advantage of. In addition to the undeveloped applications of stablecoins in e-commerce and forex, stablecoins have not been pushed to their potential. traders (unsuccessfully) rushing to get their profits But the world waits, and interest is growing. Fast. What’s Next? In practice, we already have a brings the price-stability of the U.S. dollar with blockchain technology and official regulation, and it’s . regulated stablecoin in the US. The GUSD passed a security audit by the external firm Deloitte Meanwhile, another “Big Four” firm, . PwC, has partnered to create a new USD stablecoin A recent report illustrates just how widespread institutional engagement with stablecoins really is. There are , 23 of which are already live. And it’s easy to see why, beyond the benefits they provide to inflationary economies, stablecoins provide: 57 stablecoin active projects All the benefits of a blockchain-based currency: decentralized, transparent, immutable A price-stable entry point to crypto novices against a highly volatile market A bridge between crypto and fiat for entering AND exiting the market A system for P2P payments between trusted parties with huge benefits in forex An off-bank network for secure storage of currency Innovative fintech companies are already clamoring to find a niche in this exciting new market. The firm Interblockchain is making this available to the masses by . It’s already embedded into billions of browsers. integrating cryptos into the world’s first browser-based payment app And remember: Since the Winklevoss’ have already started the revolution with Gemini, it’s safe to say the next Zuckerberg is just around the corner. 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