The stablecoin showdown

Opinion by Adrien Stern, founder and CEO of Reveel

Stablecoins have been hailed as crypto’s killer use case. Businesses, banks, payment providers, projects, tech giants and governments are getting on board with leveraging crypto without its volatility. For consumers, stablecoins are a way to seek refuge with gains during bear markets and regulatory uncertainty. 

The stablecoin value proposition 

Stablecoins facilitate cheaper trade, payments and cross-border transactions. Issuers can earn interest on reserves held in treasuries, banks or other low-risk assets. Stablecoins are heavily used in lending protocols and earn additional fees. Collaborations with fintech firms and payment processors drive more use cases. 

Established brands, including Tether and Circle, have built significant market trust, creating barriers for new entrants. The stability and transparency of reserve backing are critical factors that influence user choice. 

The case for a unipolar system 

A dominant stablecoin benefits from increasing adoption, making it more valuable and liquid. Trust in a single issuer can drive a winner-takes-all outcome. The first stablecoin to secure full regulatory approval globally could set the standard. 

It’s essential to recognize that, like chains, different stablecoins serve varied needs — payments, decentralized finance (DeFi), remittances and cross-border trade. Local preferences and regulations may lead to region-specific leaders, such as Asia favoring CBDCs and South America shielding against inflation. Interoperability and crosschain solutions may support a coexistence model. The ability to transact with different stablecoins and set up automatic swaps is the user experience of the future. 

A secure stablecoin ecosystem is critical for investors, consumers and the broader financial space. Investors require exposure to the growing stablecoin market through investments in issuers and associated technologies. There are, however, risks of regulatory crackdowns, reserve management and technological failures, which encourage diversified bets across multiple stablecoins. 

For consumers, stablecoins provide cheaper and faster payments, particularly for international transactions. The access to DeFi via a gateway to lending, borrowing and earning interest outside traditional banking continues to be a unique advantage. It’s also a safer haven to house earnings when compared with volatile cryptocurrencies and coins. 

With a growing list of innovations and initiatives, it’s clear that the stablecoin war is more than a crypto conflict. It’s a battle over who will usher the world into the next iteration of digital money. The space can use more people closely following the stablecoins rather than the shitcoins. 

Adrien Stern is the founder and CEO of Reveel, an omnichannel payments infrastructure that enables one-click crosschain payments and connects people across borders and networks. Before founding Reveel, Adrien led the digital transformation team at BNP Paribas CIB. He was previously a venture builder and owns another company — Bridge Music — a record label and recording studio. Adrien has a bachelor’s degree in sciences of management from the University of Lausanne and a master’s in business administration from Esade. 

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.