Each country’s movement toward the central bank digital currency (CBDC), a digital currency issued by central banks, is accelerating.
As the world’s first CBDC commercialization is known to be imminent, it is an interesting point to watch how it will affect the legal currency of each country as well as cryptocurrencies. Among these, stablecoins, which are cryptocurrencies linked to legal currency and price, are attracting attention as new projects are constantly pouring out.
Digital Today’s crypto-specialized YouTube real-time broadcast’Kasoo’ (Crypto Anarchist’s direct-ball hangout) dealt with CBDC and stablecoins on the subject of the broadcast on April 15th.
In this event, held by Jung-hyuk Jang of Atomix Lab, a blockchain technology specialist, and reporter Chi-gyu Hwang of Digital Today, there are already several stablecoins. Information and opinions on how it will affect the market and the cryptocurrency ecosystem were shared.
Recently, new stablecoins such as Pay Protocol and Liquidity are appearing one after another. Even though several stablecoins, such as Tether with a fixed one-to-one price with the legal currency and Makerdao, a collateral-type Ethereum-based stablecoin, are already available, the reason that new stablecoins continue to be released is due to the proliferation of decentralized finance (DeFi).
Stablecoins such as Tether have been widely used in centralized exchanges, but as DeFipan has grown in recent years, the demand for stablecoins, which serves as a standard for transactions, has increased sharply.
Director Joong-hyuk Jang emphasized that “DeFi is providing an opportunity to introduce a new stablecoin.”
There are many types of stablecoins, but in the big frame, fiat currency fixed types such as Tether and cryptocurrency collateral types such as Maker Dao were mainstream. However, in recent years, algorithm-based stablecoins are also attracting attention.
UST issued by Terra can also be seen as an algorithmic stablecoin, and although it appeared in interest, the Pay Protocol, which was controversial with errors from the beginning, is also based on the algorithm. Algorithm-based stablecoins have a structure that can be issued in large volumes to meet the demand for stablecoins in the DeFi market, but stability and sustainability are still unknown.
In the case of CBDC, some observers say that commercialization will affect cryptocurrency as well. In response, Director Jung-hyuk Jang believes that the CBDC will not directly affect each other as much as the playing water is different. Rather, it could hurt the business of stakeholders in existing financial markets such as CBDC banks.
In this KASUE,’DM’, which is being prepared by Facebook, was also mentioned as a topic of conversation. DM initially advocated a global single currency based on a currency basket made up of major currencies from each country, but the character has changed to a stablecoin linked to individual fiat currencies such as the dollar. However, unlike the current stablecoins targeting the cryptocurrency ecosystem, it is expected to position as a payment service in the real economy. As such, DM can be a variable for existing financial service companies, said Director Jang Jung-hyuk.
You can check out the Kasu video on the theme of stablecoin and CBDC on Digital Today’s YouTube channel . The 6th episode, which will be broadcast on Thursday at 8 pm on Thursday, the 22nd, will cover the phenomenon of high prices of certain cryptocurrencies only at the Korean cryptocurrency exchange, the so-called kimchi premium, and the future prospect.
Author/ Translator: Jamie Kim
Bio: Jamie Kim is a technology journalist. Raised in Hong Kong and always vocal at heart. She aims to share her expertise with the readers at blockreview.net. Kim is a Bitcoin maximalist who believes with unwavering conviction that Bitcoin is the only cryptocurrency – in fact, currency – worth caring about.