A new report called “The State of Stablecoins 2019: Hype vs. Reality in the Race for Stable, Global, Digital Money” was recently released and it says that stablecoins will play a major role in crypto adoption in the future.
This report had information collected from over 40 crypto companies. The lead author was George Samman, a well-known crypto advisor. According to the report, he was commissioned to research the field in an independent way and to report what he found out. Companies like Reserve, Arrington XRP Capital and Blocktower financed the experiment.
One of the predictions made by the author of the reports was that the price of stablecoins would help them to play a crucial role in adoption as they are way less volatile than most cryptos, like Bitcoin, are.
Other points that were highlighted in the document are that countries facing high inflation will be some of the first to adopt cryptos. For instance, Venezuela and Angola, both of which are suffering severe inflation crisis, will be important for stablecoin adoption as they will give people means to be able to hold on their money.
Even countries like Argentina, which has a more “moderate” inflation of around 40% will still beneficiate a lot from all this. Also, the author noticed that major companies as Facebook will be important for stablecoin adoption as the company is intending to launch its own token sometime soon.
The United States dollar (USD) will be the most tokenized asset in the next 12 to 24 months, the author believes. However, the author also believes that if the USD is too massively adopted as a stablecoin, it can also have a negative effect and make the fiat currency inflate in price, which could lead to instability.
According to him, it is best to use various assets instead of only national fiat currencies when creating a stablecoin.
The author’s perfect model for a stablecoin is one that can withstand the volatility of the market easily and be affordable at the same time. It has to have comprehensive stability parameters that are clear to the users and be transparent in order to create trust.
Even JPMorgan, which is not very pro-crypto, has decided to develop its own USD-pegged stablecoin. This, the company believes, could increase the efficiency of international settlements made by the company.
The views and opinions expressed in the article New Reserve Report States Stablecoins, or Fiat-based Tokens, Will Play Key Role In Crypto Use do not reflect that of 48coins.com nor of its originally published source. Article does not constitute financial advice. Proceed with caution and always do your own research.