How Adoption Of Cryptocurrency Stablecoins Can Open Access To The 1.7 Billion Unbanked and Poor

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Stablecoin initiatives are developing at a rapid pace. Adoption of stablecoin, a form of collateralized cryptocurrency pegged to a stable fiat currency like the yen or dollar are being debated by central banks. This is a good sign—regulators are discussing how blockchain style coins can become mainstream payment options. However in developed economies where the banking sector is more established, regulators are still cautious of risks.
While the basic use-case for the mass adoption of stablecoin is as a potential fiat-currency replacement, how those coins are implemented is hotly debated. Coins collateralized by traditional currency, like the euro, United States dollar or the pound can be structured in different ways.
Based on the European Central Bank (ECB) paper “In Search For Stability In Crypto-Assets: Are Stablecoins The Solution?” (August 2019), stablecoin adoption, particularly in well-regulated countries, for example counties in the European Union, would need definitive rules governing the accountability of the issuer, decentralization responsibilities, and clear guidelines for what underpins the value of the asset before widespread implementation can occur. Last month’s statement by the French finance minister regarding the intention to block Libra development in France makes it clear that stablecoin adoption has challenges.

At the same time institutions like the Financial Markets Authority (AMF), part of the French financial regulatory system, announced in July 2019 plans to create a voluntary regulatory framework for crypto firms.

While Libra may face an adoption risk among European nations, it seems clear that coin development will continue.

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