Cryptocurrency adoption has seen a significant boost in 2019, where major financial institutions like Wells Fargo, JP Morgan, and ING have either tested their stablecoin or are pondering over launching one. Not only that countries like China and Russia who were not very keen on regulating or adopting cryptocurrencies have found a way to regulate it. Frances and Portugal have made crypto-to-crypto transaction tax free.
One important thing to note here is the growing trend of stablecoins, be it central bank-issued or commercial banks launching their own stablecoin, stablecoin initiatives are growing more rapidly than what many would have expected. These blockchain-powered stablecoins can play a major role in providing banking services to 1.7 billion unbanked and poor.
Central Banks around the Globe might Start Developing their own Stablecoin
Although the acceptance of cryptocurrency has risen tremendously since 2018, however, a load of attention and regulatory ease ups have prompted many private players to dive into the stablecoin game. This has particularly got the governments around the globe concerned as traditionally only a government had the power to issue a currency.
The newly announced libra, in particular, has managed to irk regulators and governments around the globe, as many fear it's working model can create a shadow banking like situation where the central government-issued fiat currency might lose its value to it.
That is why central governments around the globe are seriously looking into the underneath technology of blockchain and looking to issue their own central bank-issued decentralized currency to avoid giving power in the hands of private players. ING's chief economist had similar thoughts and believed libra's announcement has prompted central banks to accelerate their efforts.
Stablecoins could Fulfill the Idea of Banking the Unbanked
A recent report from The Global Findex database 2017 which is funded by Bill and Melinda Gates foundation highlighted that advances in digital technology can help achieve the World Bank goal of universal banking.
Cryptocurrency is not just limited to the trade market and big investors, it has actually helped nations like Venezuela to survive its hyperinflation and trade sanctions from the US, Iran decided to regulate crypto amid trade sanctions threat, Dash helped poor Nigerians to get access to banking.
With the emergence of stablecoins as a go-to option for both central banks and private institutions, the era of the stablecoin could pave the path for providing banking services to those who need it the most.