The Blockchain “Step Function” Is Coming

We’re 13 years into the great crypto experiment now and 4 years since crypto surged into the mainstream consciousness with the price run up in 2017.

In many ways we’ve made infinite progress towards the complete fundamental re-tooling of every facet of our lives that blockchain zealots have been promising us.

In many ways we’ve made almost none.

Bitcoin trades more than $9 bn a day, I can provably own abstract digital actions with NFTs and I can earn yields many times above what is offered in the traditional financial world. Yet I still can’t buy a cup of coffee with my crypto, remittances and FX are still exploitatively expensive, and (especially in Canada) if I’m a crypto company I can barely open a basic bank account.

Innovation and change comes in fits and starts and then in step functions. It’s nowhere and then it’s everywhere.

The thesis I’ve always tried to approach the blockchain world with is to build solutions that are no-brainers to adopt for everyone from tech wizards to rookies. Said differently, solutions that leverage the unique aspects of blockchain to deliver simple value propositions that are objectively better than what can be offered by the traditional world. All without sacrificing user experience or looking technically complex.

The obvious tangible value propositions that resonate globally are solutions that are cheaper, faster, more personalized, more rewarding, and higher yielding than anything built with traditional tech. Yet there are less tangible, but more societally impactful value propositions as well such as being more secure, more private, more inclusive, more repeatable, and more self-sovereign. These benefits sit just underneath the surface and come as a bonus of an “on-chain” world.

So why haven’t we tipped over?

Connection, simplicity and trust are key. A single point-solution adopted by one party in a vacuum doesn’t matter. A fantastic solution that is only usable by developers doesn’t matter. A slick solution that has no transparency and iffy regulatory status ultimately doesn’t matter either. The above solutions abound in blockchain currently, but solutions that blend connection, simplicity and trust are almost non-existent.

This is where our vision of Stablecorp comes in.

Stablecoins are the ultimate bridge technology between the current world and the “on-chain” world. The fundamental value of free-floating, blockchain-native assets like BTC and ETH is driven by the technology itself and valuation models are complex and new. These assets are also vulnerable to losing value as new blockchains come online that could replace them.

Stablecoins on the other hand, at least fiat-backed ones, are simply given their value by the issuer holding the equivalent amount of fiat at a bank. $1 in a bank = 1 stablecoin issued. The technology aspect becomes just a delivery mechanism that doesn’t need to be deeply understood. It is the perfect vehicle for delivering those initial “step function better” blockchain solutions that don’t feel scary or complex and are easily adoptable by merchants, intermediaries and end-users alike. Widespread stablecoin adoption is the first key step in moving towards an “on-chain” world.

Let’s dream for a minute…

Think of a dollar that securely lives on your phone, can earn you yield while you decide how to deploy it, can be spent at any merchant for anything using established payment rails, can be converted into any other currency (crypto or FX) instantly for low-fees, and can be sent globally peer-to-peer with the click of a button. Assume that same dollar could also be used by an enterprise to autonomously re-fill their supply chain and earn yield in real-time on dollars that are sitting idle. Or by an investment fund to drastically streamline subscriptions and fund operations and maximize yield on assets waiting to be invested.

Then, if you want to, look under the hood and see that the dollar is indeed issued by a Canadian bank as a transferable digital deposit, backed by the full creditworthiness of the bank, and redeemable 1:1 for the “traditional” fiat that you’re used to. Why would you ever go back?

That’s where Stablecorp is going.

We’re nearing launch of the VCAD stablecoin issued by A-rated VersaBank.

Money will only ever be the same in the ways you want it to be. Everything else will be better.

Stay tuned for a ton more!

Alex McDougall

President, Stablecorp