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”.