7 Highlights From “Stablecoins Are Killing It” Episode #9 Featuring Joel Johns & Gil Hildebrand

On July 23rd we hosted “Stablecoins Are Killing It” Episode #9 featuring Joel Johns, one of the leading stablecoins analysts (formerly with Outlier Ventures), and Gil Hildebrand, CEO of Gilded, a leader in leveraging stablecoins for global payments. The first 30 minutes of Episode #9 featured our panelists giving presentations filled with lots of great data. The final 30 minutes were spent on Q&A with the audience. You can view the entire episode below:

Or you can read my 7 highlights :

1. Usage of Stablecoins Is Exploding As Witnessed By The Growth In Wallet Addresses Receiving Stablecoins

Gil presented data the graph below, with data provided by Joel, that showed addresses receiving stablecoins increasing by 5X in the first 6 months of 2020:

2. Gil Believes That The Recent Announcement By The Office of the Comptroller of the Currency (“OCC” ) Is A “Huge” Deal

Gil thinks that integration with existing tools (e.g. Quickbooks) and processes (e.g. KYC) is key to stablecoin growth. Thus, the recent announcement by the OCC of the ability of bank’s to custody crypto is huge deal because banks have already performed KYC, eliminating a major hurdle to stablecoin usage. If banks work with stablecoins it eliminates the need for bank customers to transfer funds from the bank to a crypto exchange to get stablecoins.

3. Centralized Solutions Dominate Stablecoin Market Cap Today

Joel highlighted how Maker/DAI is the largest decentralized provider of stablecoins today, in terms of market cap, and DAI only comprises about 1% of the today’s total stablecoin market cap:

4. DAI’s Share OF Stablecoin Transactions & Stablecoin Volume Is Far Higher Than It’s Share Of Market Cap Due To DAI’s Use In DeFi

While Tether dominates stablecoin usage because the role it plays in the OTC and exchange ecosystems, Joel highlighted that DAI has 6X the share of usage than it’s share of market cap because of it’s role in DeFi:

5. USDC Dominates In Terms Of Dollars Per Transaction

In terms of people outside of crypto using stablecoins for global payments, USDC has emerged as the favorite for larger transactions given that it’s viewed as being “safer” than Tether given it’s audited regularly to confirm it’s fully backed.

6. U.S. Exchanges Avoid Tether

While Asian exchanges like Huobi, OKEx, Bitfinex, and Binance hold large amounts of Tether, U.S. exchanges like Coinbase and BlockFi avoid Tether and largely hold USDC.

7. There Are Multiple Ways That New Stablecoins Can Compete Against Tether

Both Joel and Gil said they if the were launching a new stablecoin they would invest in applications (like Gilded) to accelerate the infrastructure needed to leverage stablecoins.

There remains a huge opportunity in cross border payments where stablecoins offer massive advantages in terms of both cost and speed.

Given the growth of DeFi, there is an opportunity to further optimize stablecoins for the DeFi ecosystem.

It was noted that Paxos will benefit from powering crypto brokerage soltuions for Paypal and Revolut customers.

The bottom line is it’s still early days for stablecoins with lots of opportunity for innovation and product market fit.

We have another great show next week (Thursday July 30th) featuring Ryan Watkins from Messari, and Eyal Hertzog with Bancor and PEG Network. You can click here to register on Zoom.

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