Will stablecoins be able to sail into the mainstream?

Published: 11 October 2019
Author: FINTECH Circle and KAE

FINTECH Circle and KAE bring you a bi-weekly breakdown of all things fintech through educational videos!

This week we look at the potential of stablecoin.

The main barrier for cryptocurrencies earning mainstream use has been the volatility of their value; frequent news stories of Bitcoin’s value falling significantly over a short space of time no longer cause any kind of surprise.

A key driver for the volatility in cryptocurrency markets is the fact that many cryptocurrencies derive their value from Bitcoin, Ethereum, or other well established cryptocurrencies. This means that one of the established coins crashing can, and frequently does, have a massive knock-on effect on the whole market.

Stablecoins aim to solve this through being backed by a stable entity to decouple their value from other cryptocurrencies, retaining the cryptocurrency benefits of speed, low cost and global reach while mimicking the stability of traditional money.

The majority of examples use fiat currencies for their backing, such as Bangkok-based THBEX, a stablecoin aimed at international transfers to neighbouring countries for SMEs, which is derived from the value of the Thai Baht (THB).

THBEX is just one of many examples across Asia, where the concept seems to have found its feet remarkably well. Inversely, the European and American response to Facebook’s Libra project have demonstrated that this part of the world is not ready to embrace the concept just yet. So the question remains, are projects such as Facebook Libra destined to fail, or is there hope yet for stablecoins?

Check out the video to find out more!


Don’t miss out on any industry’s updates – sign up to the FINTECH Circle newsletter!