On June 12th, Garrick Hileman our Head of Research spoke at CryptoCompare’s Digital Asset Summit about The Future of Stablecoins.
Joined on a panel by Joon Ian Wong (Coindesk), Jennifer Senhaji (MakerDAO), Marcos Viriato (Parfin) and Simona Macellari (Ekon Gold), Garrick shared his perspective that “Stablecoins are arguably the most exciting sector of crypto.” And when you consider the projects already in the market and all the new initiatives, it’s not hard to see why.
So despite the flurry of conversations he’s had around stablecoins and Facebook’s recent announcement of Libra, we were able to steal 20 minutes of Garrick’s time to hear his key takeaways from the event.
Libra: Unannounced, but all the buzz
Libra hadn’t yet been announced at the time of this panel, but the implications of Facebook’s 2.4 billion monthly active users getting a taste of crypto were front of mind for the events’ attendees and panelists.
For cryptocurrencies, Libra could prove to be one of the most significant and positive events in their history as entirely new waves of users will join the digital currency ecosystem. Despite the questions still to be answered, this project has proven to be a huge validation for cryptocurrency and blockchain technology as the financial infrastructure of the future.
Tether remains resilient, but faces stiff competition
Another interesting stablecoin discussed in last Thursday’s Summit was Tether.
Tether, as many of you know, is the largest stablecoin on the market and second most traded cryptocurrency behind Bitcoin. It’s been under both legal and competitive pressures following regulators’ questions about its reserves and the launch of more transparent and New York regulator approved stablecoins like Paxos Standard last year.
However, what was particularly interesting to Garrick’s panel was the fact that Tether has remained resilient despite these difficulties. Tether’s staying power in spite of the considerable turbulence it has experienced is a testament to the demand for stablecoins with established track records.
What lies ahead for stablecoins?
As market conditions change and prices swing, stablecoins continue to prove themselves as valuable tools for cryptocurrency users and traders to manage currency risks. By minimizing volatility and creating ease of mind, Hileman argues, stablecoins can help new users become comfortable transacting and storing cryptocurrencies in their digital wallets. In other words, stablecoins can create a bridge to the broader decentralized finance economy and help new users, in particular, make cryptoassets and blockchain applications a part of their financial services mix.
As exciting as things are at the moment, the overarching consensus of this panel is that we’ve only seen the beginning and it’s reasonable to expect, even encourage, stablecoins to continue to evolve.
To borrow an analogy Garrick used on the panel to describe adoption, cryptocurrencies like bitcoin are in the third inning of a baseball game – a lot has happened, but there’s still plenty of game left to play.
For stablecoins, however, we’re only in the first inning and there’s an exceptional amount of untapped opportunity.