UntangledFin
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UntangledFin

Payment: The race between stable coins and CBDCs

The future of trade and supply chain finance is tokenised_Part 2

  • JPM Coin, a cryptocurrency run on private blockchain Quorum reportedly went live in late 2020 after 2 years in development. It is initially used to settle within the JP Morgan’s international network.
  • Paypal announced that they would launch a service to allow customers to spend Bitcoin and other cryptos at 26 million merchants on its network in 2021. This is anticipated to bring crypto currencies to the mainstream.
  • USDC is a stable coin guaranteed by off-chain deposit of USD. The crypto currency is therefore fiat-backed. The deposit is regularly audited. Through a partnership with Visa (above) and Coinbase we expect it to become a major player in the B2B payment space.
  • Dai, like USDC, pegs 1:1 to USD through an on-chain collateralised lending mechanism. Anyone can generate Dai by depositing Eth (which powers the Ethereum blockchain) and other acceptable collateral with a smart contract. It is expected that real-world assets such as invoices and loans could eventually be accepted as collateral, thus vastly increase the use of Dai in the real economy.
  • Diem is a stablecoin to be issued by Diem Association which was set up by Facebook and 26 other organisations. It is pegged 1:1 against USD and targets specifically at the unbanked in emerging markets.

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