Stablecoins are global payment rails for crypto the way VISA is a global payment rail for fiat money, for example, USDC is regulated, settled instantly and without intermediaries all around the world and that's MUCH more efficient than the current banking system (which is already digitized by the way). If you can't see this I don't know what to tell you.
As far as incentives are concerned the main hurdle I see is that most stablecoins are fully-reserved, which is not capital-efficient. On the other hand, crypto-backed stablecoins are hard to peg and subject to smart contract attacks so much more dangerous for the system.
I agree about the threat of regulations though, in fact there's a push right now to force stablecoin issuers to obtain a banking license in the US, which would be terrible for any start up.
I hope this bill gets rejected.
Well said mate. If the old fashion banking system is to be forced the stablecoin issuers, then a new debate will show up.
In terms of incentives, there is no way for tens of them to survive as for me. Even when we compare them with USDC, they cannot find a use case. What I am projecting is that If they can be categorized as digital assets (beyond being pegged to USD) then they can use inventives as strategic actions. However, until that stage, whether they will be regulated or neglected is the primary enigma for now.
Humm, I am honestly not too sure what you're trying to say here.
We do want competition and innovation so forcing a super-costly banking license on start-ups is a bad idea imo,
Stablecoins have a massive use case though, just look at the growth:
https://stablecoinindex.com/marketcap
It's not an enigma whether they'll be regulated or not, they ARE being regulated right now, see MICA in Europe or STABLE act in the US, and that's just the start...
I already know about MICA but I'll check STABLE, as well. What I highlighted was also about the stablecoins backed by digital assets not just the US dollar. Additionally I question whether they will be acknowledged as stablecoin or digital asset when the existing fiat currencies are digitalized. Thanks for nice inquiry 😌
Afaik crypto-backed stablecoins are regulated under MICA, and would be under STABLE because the law has enormous scope.
Still unsure of what you mean by "when the existing fiat currencies are digitized". Fiat has been digitized for decades now: the number on your bank account do not represent actual paper reserves, you also have service like PayPal and CashApp that transfer digital fiat all day.