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Leadership Thought: Exploring Stablecoins and Their Role in Crypto Payments

Leadership Thought: Exploring Stablecoins and Their Role in Crypto Payments

Stablecoins have emerged as a pivotal component, offering a bridge between the volatile nature of digital currencies and the stability of traditional fiat money. Anndy Lian, a best-selling book author, and Tran Hung, CEO of UQUID, explore the adaptability of stablecoins in crypto payments and their potential to revolutionize the financial landscape.

Stablecoins are digital currencies pegged to a stable asset, such as the US dollar, to minimize price volatility. As they become integral to the crypto ecosystem, understanding their impact on finance and daily transactions is crucial. This episode brings together two thought leaders to discuss the current state and future potential of stablecoins in the world of payments.

The Role of Stablecoins in the Cryptocurrency Ecosystem
Anndy Lian emphasizes that stablecoins serve as a crucial element in the cryptocurrency ecosystem, acting as a stable medium for transactions. They provide a familiar denomination for users, akin to the US dollar, facilitating easier and more understandable transactions. Stablecoins also encourage broader adoption of cryptocurrencies by offering a less volatile alternative for payments and investments.

Tran Hung highlights the impact of stablecoins in emerging markets, where fiat currencies often face devaluation. Stablecoins offer a reliable store of value, allowing users to preserve their purchasing power. In UQUID’s ecosystem, stablecoins have become a preferred payment method, enabling users to make purchases without worrying about currency fluctuations.

Stablecoins and Cross-Border Payments
Stablecoins are revolutionizing cross-border payments by offering faster, cheaper, and more transparent transactions compared to traditional methods. Tran Hung notes that stablecoins enable instant settlements, reducing the time and cost associated with cross-border transactions. This transparency and efficiency make stablecoins an attractive option for global commerce.

Anndy Lian adds that the transparency of blockchain technology enhances the security of cross-border payments. Transactions can be easily tracked and verified, providing an additional layer of security. Moreover, the stability of stablecoins compared to other cryptocurrencies makes them a preferred choice for international transactions.

The Future of Stablecoins and Central Bank Digital Currencies (CBDCs)
As central banks explore the development of their own digital currencies, the relationship between stablecoins and CBDCs becomes a topic of interest. Anndy Lian believes that stablecoins and CBDCs can coexist, serving different purposes. While stablecoins facilitate quick and low-cost transactions, CBDCs can act as a stable store of value within domestic markets.

Tran Hung agrees, noting that CBDCs are likely to operate on private blockchains, focusing on local transactions and government-related payments. In contrast, stablecoins, built on public blockchains, offer global accessibility and can be used across borders. This distinction allows both forms of digital currency to complement each other in the evolving financial landscape.

The Dominance of USDT in the Stablecoin Market
USDT, or Tether, has maintained its dominance in the stablecoin market due to its first-mover advantage and widespread adoption. Anndy Lian attributes USDT’s success to its early entry into the market and its ability to capture significant liquidity. Despite controversies, USDT has established itself as a reliable and widely used stablecoin.

Tran Hung emphasizes the trust that users have in USDT, particularly in emerging markets where stablecoins offer a solution to currency devaluation. The liquidity and accessibility of USDT make it a preferred choice for both individual users and large institutions.

The Future of Crypto Payments
Looking ahead, both experts envision a future where stablecoins play a central role in crypto payments. Anndy Lian hopes to see a diversification of payment methods, with other cryptocurrencies gaining traction alongside stablecoins. He believes that embracing a variety of digital currencies can drive further adoption and innovation in the crypto space.

Tran Hung sees stablecoins as a gateway to broader cryptocurrency adoption, particularly in regions with unstable fiat currencies. He anticipates that stablecoins will continue to gain popularity, offering a stable and efficient payment method for everyday transactions.

Conclusion
Stablecoins are not just a trend but a transformative force in the world of payments and commerce. From enabling cross-border transactions to providing a stable store of value, stablecoins are reshaping the financial landscape. As we look to the future, the continued evolution and adoption of stablecoins will play a crucial role in driving financial inclusion and innovation.

 

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
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Addressing the US debt crisis: The role of crypto and regulatory clarity

Addressing the US debt crisis: The role of crypto and regulatory clarity

The US faces a debt crisis that threatens to undermine its economic stability and global leadership. The national debt has surpassed US$30 trillion, and interest payments are projected to become the largest expenditure by 2051, surpassing even Social Security.

The debt-to-GDP ratio is expected to rise to 136 per cent by 2028, a level that many economists consider unsustainable. The causes of this fiscal imbalance are manifold, but they include wars, recessions, tax cuts, pandemic relief, and infrastructure spending. The consequences could be dire, as the US could face higher borrowing costs, lower growth, reduced public investment, and diminished credibility.

In this context, the crypto industry offers a potential alternative to the traditional financial system, one that is more decentralised, transparent, and innovative. Crypto assets, such as Bitcoin and Ethereum, are powered by blockchain technology, which allows for peer-to-peer transactions without intermediaries.

Crypto platforms, such as Coinbase and Binance, provide users with access to a variety of digital assets and services, such as trading, lending, staking, and gaming. Crypto enthusiasts argue that crypto can empower individuals, foster innovation, and create new economic opportunities.

However, the crypto industry also faces significant challenges, especially in the US. The regulatory environment for crypto is unclear, inconsistent, and hostile. The Securities and Exchange Commission (SEC) has sued several crypto platforms, such as Coinbase and Binance, for allegedly operating illegally as brokers, exchanges, and clearing agencies without proper registration.

The SEC has also rejected numerous proposals for crypto exchange-traded funds (ETFs), which would provide investors with easier access to crypto assets. The SEC claims that it is protecting investors from fraud and manipulation, but many in the crypto industry accuse it of stifling innovation and creating uncertainty.

Coinbase, the largest crypto exchange in the US with over 100 million customers and billions of dollars in daily trading volume, has launched a campaign to bring regulatory clarity to the crypto industry in the US.

The campaign, dubbed “Stand With Crypto,” urges the 52 million Americans who own crypto to contact their government representatives and push for an overhaul of the financial system and a clear regulatory framework for digital assets.

Coinbase argues that the current “enforcement only” approach by the SEC is putting jobs, innovation, and global leadership at risk. Coinbase calls for legislation that allows fair rules for the road to be developed transparently and applied equally.

They are also expanding their presence in other jurisdictions that have more favourable regulations for crypto. Coinbase announced that it obtained registration with the Bank of Spain to act as a crypto exchange and custodian wallet provider.

This follows similar registrations in Germany and Ireland earlier this year. Coinbase said that it is “encouraged” by regulatory developments in the European Union and UK and will continue to invest in Europe and the UK. Coinbase hopes to offer its customers more products and services in these markets, such as crypto ETFs.

Coinbase is not alone in seeking regulatory clarity and diversification. Many other crypto platforms are looking outside the US for growth opportunities. For instance, Binance has established regional subsidiaries in Singapore, Australia, Jersey, Uganda, and Brazil. Kraken has applied for a banking license in Wyoming. Gemini has partnered with a UK bank to offer crypto savings accounts.

The US government should take note of these developments and reconsider its approach to crypto regulation. The US has the potential to be a leader in the crypto space, but it risks losing its competitive edge if it continues to stifle innovation and create uncertainty.

The US should embrace crypto as an opportunity rather than a threat and work with the industry to create a balanced and clear regulatory framework that protects investors while fostering innovation. The US should also address its debt crisis before it becomes too late and hard. Crypto could be part of the solution rather than part of the problem.

How crypto can help solve the debt crisis

Crypto can help solve the debt crisis in several ways. First, crypto can provide an alternative store of value and hedge against inflation. As the US government prints more money to finance its spending, the value of the dollar could decline, and inflation could rise.

This would erode the purchasing power of savers and investors and increase the cost of living. Crypto assets, such as Bitcoin, have a limited supply and are not controlled by any central authority. They can preserve their value and offer protection against currency devaluation and inflation.

Second, crypto can enable more efficient and inclusive financial services. The traditional financial system is plagued by high fees, slow transactions, intermediaries, and barriers to entry. Many people are unbanked or underbanked, meaning they lack access to basic financial services, such as savings, credit, and insurance.

Crypto platforms, such as Coinbase, Bybit and Binance, can offer low-cost, fast, and secure transactions without intermediaries. They can also provide access to a variety of digital assets and services, such as lending, staking, gaming, and NFTs. Crypto can empower individuals, especially those in developing countries or marginalised communities, to participate in the global economy and improve their financial well-being.

Third, crypto can foster innovation and growth. The crypto industry is one of the most dynamic and creative sectors in the world. It attracts talent, capital, and ideas from diverse backgrounds and disciplines.

It constantly experiments with new technologies, protocols, and applications. It creates new markets, products, and business models. Crypto can drive innovation and growth in other industries as well, such as energy, healthcare, education, and entertainment. Crypto can also generate tax revenues and jobs for the US government and economy.

Final thoughts

The US is facing a debt crisis that could have serious consequences for its economic stability and global leadership. The crypto industry offers a potential alternative to the traditional financial system, one that is more decentralised, transparent, and innovative.

However, the crypto industry also faces significant challenges in the US due to unclear, inconsistent, and hostile regulation. Coinbase has launched a campaign to bring regulatory clarity to the crypto industry in the US and has expanded its presence in other jurisdictions that have more favourable regulations for crypto.

The US government should take note of these developments and reconsider its approach to crypto regulation. The US should embrace crypto as an opportunity rather than a threat and work with the industry to create a balanced and clear regulatory framework that protects investors while fostering innovation.

The US should also address its debt crisis before it becomes too late and hard. Crypto could be part of the solution rather than part of the problem.

 

 

Source: https://e27.co/addressing-the-us-debt-crisis-the-role-of-crypto-and-regulatory-clarity-20231006/

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j

How Singapore’s stablecoin rules could boost crypto’s ‘mainstream’ banking role

How Singapore’s stablecoin rules could boost crypto’s ‘mainstream’ banking role
  • Industry executives say the proposed rules by the Monetary Authority of Singapore are timely and will boost investor confidence
  • Recent moves by Hong Kong and Europe on rules governing stablecoins will also spur wider adoption of cryptocurrencies, according to the executives

 

The unpredictable price fluctuations of cryptocurrencies have been a make-or-break game for myriad investors across Asia for months.

However, only a handful of regional policymakers have ventured to integrate these volatile assets into the mainstream financial landscape.

Now, the latest move by Singapore’s central bank to introduce regulatory guidelines for stablecoins could prove to be a milestone for its rapid adoption in traditional channels like banks, analysts say.

Unlike other cryptocurrencies, stablecoins are viewed as safe haven assets as their values are pegged to traditional currencies or other assets such as government bonds and gold.

The Monetary Authority of Singapore building in Singapore. Photo: Bloomberg
The Monetary Authority of Singapore building in Singapore. Photo: Bloomberg

The Monetary Authority of Singapore’s (MAS) regulations announced last week will apply to nonbank users of single-currency stablecoins pegged to the Singapore dollar, or any currency from the world’s 10 biggest economies, and would require issuers to maintain low-risk reserves and return par value to investors within five days of receiving a redemption request.

“The MAS seems to be paving the way for greater trust and potential formal integration of stablecoins into the banking system.

However, as these regulations are scheduled to come into effect in 2024, their precise impact on bank transactions will [need to] be monitored closely,” said Chen Zhuling, founder and CEO of crypto finance gateway RockX.

The central bank would need to hold legislative consultations before Parliament passes amendments that would bring the framework into force. The coins will be labelled as MAS-regulated stablecoin.

The distinction of having central bank-regulated stablecoins, as opposed to non-regulated cryptocurrencies, is likely to ease concerns about their stability that have curtailed their usage for physical transactions, analysts say.

Stablecoins have been the backbone for cryptocurrency trading and can potentially slash transaction costs associated with traditional banking systems to a nominal amount, while speeding up processing times to seconds.

But stablecoins have in the past failed to make inroads into mainstream financial systems because of a lack of transparency about their reserves.

Popular cryptocurrencies like bitcoin and ether tend to suffer from high price volatility. Photo: Reuters
Popular cryptocurrencies like bitcoin and ether tend to suffer from high price volatility. Photo: Reuters

Anndy Lian, author of the book NFT: From Zero to Hero, said Singapore’s guidelines could bridge the gap between fiat currrencies and digital assets.

“But this should not necessarily mean that banks will start to accept all kinds of cryptocurrencies. The volatility of other cryptocurrencies is still a red flag for many,” he said.

Popular cryptocurrencies like bitcoin and ether tend to suffer from high price volatility, whereas stablecoins tend to hold steady since they are linked to fiat currencies and other such assets.

Despite their relative safety, clamours for regulation of stablecoins grew after two such sister currencies – Terra and Luna, whose values were algorithmically pegged to the US dollar and not backed by cash – suddenly collapsed in May last year.

Singapore’s strict guidelines are meant to reassure both investors and institutions that could open new avenues for the asset class, industry executives say.

“Banks may even issue stablecoins for tokenised bank deposits as part of their rapidly developing digital transformations,” said Gerald Goh, co-founder and CEO of Sygnum Singapore, a digital assets fintech group.

“This model – fully regulated, traditional-asset backed and pegged to a high-quality ‘stable’ fiat currency like the Singapore dollar – has the potential to become a blueprint for the industry,” he added.

Do Kwon, the cryptocurrency entrepreneur who created the failed Terra stablecoin, is taken to court in handcuffs in Montenegro in March. Photo: Reuters
Do Kwon, the cryptocurrency entrepreneur who created the failed Terra stablecoin, is taken to court in handcuffs in Montenegro in March. Photo: Reuters

First among digital equals

Singapore’s stablecoin framework will put it among the first jurisdictions to have rules to prevent mishaps.

Rival financial hub Hong Kong is, meanwhile, undergoing a public consultation on stablecoins and seeks to introduce regulation for them next year.

The European Commission set the ball rolling with the Markets in Crypto-Assets (MiCA) regulation, which it introduced with the purpose of establishing a global benchmark for governing cryptos.

After being proposed by the commission in September 2020, the European Parliament approved the MiCA regulation on April 20. It is due to come into force for stablecoins from June 2024, and for other assets from December.

Anne-Sophie Cissey, head of legal and compliance at crypto firm Flowdesk, said the European legislation has set the tone for markets. “With clarification on the legal status, all crypto actors will feel more at ease to deal with those.”

Singapore’s regulation could speed up stablecoins adoption across the region, industry executives say.

“Regulators now collaborate with international entities, for example, MiCA’s announcement in Europe led to similar guidelines in various countries,” said Danny Chong, co-founder of online asset tracker Tranchess.

“This trend suggests that financial hubs like Singapore and Hong Kong should move towards converging rules. This convergence might take a few years to materialise, rather than happening immediately,” he said.

Hong Kong’s regulations are likely to follow Singapore’s soon, as it has been earnestly trying to woo crypto investors. In June, it introduced retail trading and licensing guidelines for crypto.

Many investors have already begun to gravitate towards tokenised assets.

“We are increasingly seeing more stablecoin adoption in Asia,” said Henry Zhang, founder and CEO of DigiFT, a Singapore-based decentralised digital asset exchange, adding that they were looking forward to introducing MAS-regulated stablecoins.

Tokenised US short-term bills have exploded to US$600 million this year, said Timo Lehes, co-founder of Swarm, a regulated decentralised finance platform based out of Germany, citing data from Coindesk.

The digital assets have also started making inroads past intermediaries in traditional financial channels, he said.

“We are already seeing applications taking tokenised forms of cash and financial products that cut out the middleman. In this new world, financial institutions will need to rethink financial product design that puts consumers at the heart,” Lehes said.

Central banks have laid the groundwork for cyptocurrency adoption with countries like China, India and Australia either planning to or having launched a central bank digital currency that can compete with stablecoins, said an industry executive.

“This will drive the choice and innovation needed in the market that will lead to mass adoption,” said Vincent Chok, CEO of Hong Kong finance firm First Digital.

Source: https://www.scmp.com/week-asia/economics/article/3231578/how-singapores-stablecoin-rules-could-boost-cryptos-mainstream-banking-role

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com
j j j