3P Stablecoins only have 7 Years to Win
The Big Banks are coming……(for the Consumer use case)
I believe that Bank-Issued Digital Fiat will be in the US starting in 2025. This is for the ‘Big Boy Banks’ (Wells Fargo, Chase, BoA). They’ll be slow to offer Digital Fiat, but they’ve been testing Blockchain Technology for a few years now, so they are making their way to the Finish Line as we speak.
I lived in China (my favorite Foreign Country) for a month last year. And while I was there, I saw the future of the US Financial Infrastructure.
Digital eWallets.
Digital Fiat.
Smartphones.
That’s it.
When I would go to street markets in China, 90% of the txs would be done via QR Codes + the Digital eWallets. The other 10% of the txs were done in cash by tourists like me.
My Airbnb host even walked me through all the things that could be done on an eWallet such as: Fiat Cash-In/Cash-Out, purchase Investment Products, buy Tickets, pay Utility Bills, book a Rideshare, and way more, all from within the 1 Digital eWallet App.
I 100% know this is coming to the US and I 100% know that the Big Banks will have their own Stablecoin (Digital Fiat) to use within the Digital eWallets.
The reason I know this is because when Banks want to target the Millennial Generation (to get more customers) a Digital eWallet is the only way they’ll be able to do it.
We (the Millennial Generation) will already have a Digital eWallet on our phone that acts as a Bank that can hold our Crypto, our Stablecoins, our Videogame NFTs, our Digital Sports Collectibles, and it will also plug into a Backend DEX for seamless exchange between all types of ‘Tokenized Value’ that we might be holding.
Widespread Digital eWallet usage is what the Millennial Generation will kick off, and a higher and higher % of the following generations will also prefer to use a Digital eWallet over a traditional Bank Acct (Less fees, Less paperwork, No 9–5 M-F Hours).
This Digital eWallet app on our phones could be a Binance eWallet, it could be an OmiseGO White-label eWallet, or it could be some other Digital eWallet Startup.
That doesn’t matter.
What matters is:
Digital eWallet uptake will directly eat away at ‘Number of Bank Customers’ just like Internet uptake directly ate away at ‘# of letters sent via mail’ or ‘# of times checking the Yellowpages Book’.
So the Banks will be forced to start issuing Digital Fiat just to stop the YoY bleeding of their ‘Number of Customers’ as more and more people decide to ‘exit’ their Bank acct and use a Digital eWallet on their Smartphone instead.
So I think 2025 is the year when one of the Big Boys will release a Digital Fiat product. This product will allow Customers to:
- Come into a Bank Branch and exchange their $1 of Physical Fiat for $1 of Digital Fiat credited to the Digital eWallet on their phone.
- Come into a Bank Branch and exchange their $1 of Digital Fiat for $1 of Physical Fiat in their hand.
I don’t think this product will take over everything right away, but I DO think that it will act as a Black Hole- sucking users out from other Stablecoin Ecosystems at a more rapid pace as it gains more and more Momentum (just like Amazon does to other B&M/Ecommerce Retailers).
THAT is why I’m saying that 3rd-Party Stablecoins (aka Independent Crypto Startup Stablecoins) only have 7 years to win….you need to get enough Momentum in the Consumer Use-Case to escape the Black Hole that will eventually be arriving in the form of Bank-Issued Digital Fiat.
Create your own eWallet that Consumers can use with your Stablecoin, have a Backend DEX with that eWallet, integrate with all of the BTC and ETH ATMs around the USA to enable that ‘Trust’ by allowing your Users to redeem your Stablecoin for $1 in Physical Fiat at a Retail Location…..you gotta have some plan to fight against the ‘Maximum Trust’ that a ChaseCoin/WellsFargoCoin/BoACoin will give to the Consumer.
That ‘Maximum Trust’ comes from how long those Institutions have been around (Chase Bank: 200+ years) as well as the ‘Trust’ from being able to walk into any of the 5,000 Nationwide Retail Locations and redeem the Digital Fiat for Physical Fiat.
Being able to redeem the Digital Money for an equivalent amount of Physical Money makes that Digital Money ‘real’. And eventually, after enough Redemptions, the Users of that Bank-Issued Digital Fiat will realize it is ‘real’ money, and they will just keep the Digital Fiat full-time and will Never exchange it to Physical Fiat.
THAT is the end goal.
Something interesting that my friend Prince John Bridgewater brought up is that newer banks (those without an entrenched position in the market) may offer a Digital Fiat product earlier than the 2025 date of the Big Boys. I totally agree with that. It will be an innovative product to help them win over new Millennial Customers in whatever locales they operate in.
Another interesting point is how I think ‘Respected Crypto Institutions’ could really throw the Consumer use-case for a spin before that 2025 date.
This could be Gemini or Paxos (or even Coinbase) partnering with one of the Big Boy Banks for In-Branch Redeemability for all users of their respective Stablecoins.
This would allow customers of that Respected Crypto Institution to walk into any of Big Boy Bank Branches, nationwide, and redeem their Gemini/Paxos/Coinbase Stablecoin for Physical Fiat.
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