Stablecoins In 2019: Perspectives
An Op-Ed of USDX Wallet Founder & CEO
Blockchain and crypto: now
Cryptocurrency, as a store of value, is the only successful mass product in the blockchain industry, so far. On the other hand, the deflated nature of top cryptos keeps them from becoming the real medium of exchange. Stablecoins pegged to one of the leading currencies are here to address this problem and to fill in the vacuum.
There are lots of ”blockchain-powered” projects, and new ones are frequently popping out, but there is no project that could be called a “killer app.” It looks like a “stablecoin-related” project will be The one. It won’t happen next year, but it’ll come in the next three years.
The biggest problem of current stablecoin projects is the following: they try to create a perfect stablecoin, with a working mechanism that doesn’t encounter difficulties. This is erroneous thinking. All projects are aimed at their targeted users, who don’t care about tech perfection. What they do care for is the solution to their problems: hustle-free transfers, usability, speed, price, etc. Another problem — at least for some participants of the industry — is interest from institutional and big players. The latest news about Facebook plans to launch their stablecoin is the perfect example. This means that opportunities are here and major corporations are seeing them. However, it will be challenging for them to succeed: regulations significantly limit their “movements.”
Blockchain and crypto: tomorrow
Taking into account all the latest developments in the industry, here is my 2019 forecast:
- The number of stablecoin-related projects will increase (yes, it will become a hype);
- Big tech corporations will emerge and enter the stablecoin-inspired race to develop that one “killer app/product”;
- These two factors will lead to the immense increase of competition and to the final battle between the big player and the startup. I’m betting on a startup to win. As I said earlier, established corporations will find it difficult to develop under limiting regulations of the financial sector quickly;
- Developed countries will not eagerly jump into stablecoin bandwagon — we have dollars/euros, why should we switch to stablecoins?
- Asia, on the other hand, will lead the way, especially in terms of P2P transactions and e-commerce — both industries are striving in the region;
- Final transition from the web to mobile will become inevitable;
- Regulations will be toughened since stablecoins threaten the monetary policy of governments;
- Anonymous cryptocurrencies will find it harder and harder to survive — they’re also not favored by governments;
- Developed countries will develop crypto regulations while others will try to prohibit cryptocurrencies;
- Crypto exchanges will see the significant transformation: it has started already with the likes of Coinbase taking bold steps to shake up the industry. Plus, scandals happening at exchanges in recent times are not helping the situation.
