Representatives of different companies think that stablecoins and CBDCs will be the currencies to be used for international transactions.
The crisis that the Covid-19 outbreak generated has not slowed down the seminars on cryptocurrencies. Last June 24th, the main figures of the cryptocurrency community participated in a webinar that the Chamber of Digital Commerce organized. In this seminar, they discussed the growing role of stablecoins.
Circle founder Jeremy Allaire was one of the webinar participants. Allaire was one of the first ones to give his opinion on stablecoins since Circle is the firm that created the stablecoin USDC, backed by the US dollar.
Allaire talked about how stablecoins simplify payment processes around the world and compared the possible updates of them with many relatively recent developments that we sometimes take for granted, but that we do not think they had an evolution process to be like they are today.
“We will look back the same way we do when we look at long distance calls, postal mail, or product sales by catalogs, and we will look at payments and not believe that we ever had to pay to send money,” he said.
Currently, there are stablecoins backed by physical and secure assets (or stable, as its name indicates, such as gold). As a result, these digital assets would present less volatility than traditional cryptocurrencies.
One of these stablecoins is Paxos, whose representative also participated in the webinar. Walter Hessert of Paxos, a stablecoin closely linked to cross-border payments, also gave his opinion on the matter.
Hessert noted that stablecoins will change the game for securities trading: “Will long-term stablecoins play a role in tokenization and liquidation of securities? Absolutely,” he affirmed.
Representatives of the Digital Dollar Foundation, a group of experts working to develop an official digital currency for America’s Central Bank, also participated in the webinar. This group is creating a so-called Central Bank Digital Currency (CBDC) for the US.
Daniel Gorfine, one of the founders of this group, noted that, during the work to create this digital currency, he understood that there was no reason not to go ahead with CBDC. “Even if you’re skeptical, why don’t you plan for this to happen? And, knowing that you can’t just flip a switch in five years, why not start now?”
Before this webinar, the digitization of the national currency has already been discussed in the United States of America, since, as is known, the US dollar is a currency that people in almost all the world use as a store of value, to preserve their money. Therefore, the United States does not want to be left behind in the world of digital currencies, as well as leading the market for traditional or fiat currencies.
However, a U.S. CBDC would not be the first stablecoin backed by the U.S. dollar. Allaire noted that the idea of creating a CBDC is attractive because “the use cases are so broad that they are ultimately like use cases for money. So what could you do with a dollar? That is digital.”
Hessert also noted that fiat dollars are an important area for accelerating global transactions, due to their massive international use. “Today, dollars are on the side of about 80% of transactions worldwide”; thus, countries will continue working in the development of these new digital currencies.
By María Rodríguez