Stablecoins have become a buzzword for a few months now and everyone is trying to get a piece of this rising demand be it exchange wallets and even other business. A lot of people on the street believe that they are fads but not Asher Tan, the founder of Melbourne-based bitcoin exchange CoinJar, who believes ‘stablecoin’ as the next big thing in cryptocurrency and are here to stay
Tan sees a lot of money and expertise gravitating towards stablecoins lately.
Stablecoins a FUD or beginning of a new economic era
Asher Tan, one of founders of Melbourne-based bitcoin exchange CoinJar, moved to London leaving behind his co-founder Ryan Zhou in charge of the day-to-day running of CoinJar and its 400,000 customers to see and understand what been brewing in the crypto world on the western side. Since then he has been attending conferences, meeting fintech companies, bankers, venture capitalists and the like, and asking lots of questions. And after all of this over the period of 8 months since he moved to London, he has picked up that stablecoins could be the next big thing in cryptos. He was quoted by Financial Review Australia saying
“The interesting thing right now, what’s on everyone’s lips, is what you call a stablecoin. A stablecoin is a coin pegged to a currency, usually the US dollar. It’s a craze right now, It helps you transfer money around the crypto ecosystem at a stable rate. But there’s a whole lot of applications or use-cases that could come out of it.”
The idea of Stablecoin has been over a year old now since the launch of Tether but Tan says it’s only lately that money and expertise have started to gravitate towards it. He reckons some of the big-name venture capitalists are coming in, and that geeks are seduced by it.
He also says stablecoins are not really easy to be issued and are potentially complex for any of the startups. According to him, some stablecoin creators have taken the simple approach of storing the equivalent amount of dollars and offering a tokenized version of that amount (the “custody model” or “collateralized approach” favored by, say, Japanese banks). But others are trying to engineer sophisticated, decentralized, algorithmic ways of maintaining the peg.
London to become the hub for stablecoin adoption
He also points that London is seeing a lot of activity around cryptos and stablecoins. To quote him again
“In London, I see a lot of finance people getting into it. People with 10, 20 years of forex experience are trying their hand at it. It’s drawing a lot of people from traditional financial circles, just because it’s interesting, it’s intriguing, there’s a lot of upside to it.”
Although London is an acknowledged hub for tech start-ups these days, particularly fintech, it still seems surprising to see Tan pick Europe as a target for expansion rather than booming Asia or the silicon-friendly US. The reason, it turns out, is as much to do with regulation and culture as with commerce.
While Asher has picked up some good ground level research to draw his conclusions on stablecoins, it’s still a long way to see where stablecoins exactly fit in the world of cryptocurrencies. Will, they just help traders soak volatility or will they have a much wider role in years to come.
What is your view on stablecoins and their roles going forward? Do let us know your views on the same