By Makkie Maclang
As the next CoinGeek Conference of the year is being held in October 5 to 7 in New York, it is quite nice to look back on CoinGeek Zurich, which was recently held last June. The three-day conference was able to delve into many interesting topics in the cryptocurrency world, and one of them is stablecoins, which is the talk of the town due to them being backed by fiat currency.
The panel discussion on stablecoins is moderated by Jimmy Nguyen, founding president of Switzerland-based global industry organization Bitcoin Association; and panelists include BitBoss co-founder and CEO Matthew Dickson, Alt 5 Sigma Inc. Executive Chairman Richard Groome and GAP600 CEO Daniel Lipshitz. A stablecoin is “a digital currency pegged to a fiat currency,” and exhibits the same uses as that of fiat currencies, like the U.S. dollar and the Euro.
It is called a stablecoin precisely because it is not as volatile as digital currencies as its price is linked the fiat currency it is backed by. For instance, the price of stablecoin Tether, called USDT, is linked to the price of the U.S. dollar, where one USDT is equal to one U.S. dollar. Stablecoins can also be backed by reserve assets, such as gold, oil and real estate.
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“We have many clients from years gone by that are quite sizable. They have extremely significant problems in payments with letters of credit guarantees, verification of goods at port, etc. And the pandemic has only exasperated this, as we all know. There’s supply chain issues almost everywhere in the world now,” Groome said.
“So, some of them have actually come to us and said, ‘look, we’d like to join the blockchain and we’d like to have a more efficient payment system rather than archaic letters of credit, etc. How can you help us?’ So, we think that by introducing [stablecoins] to a lot of our trading clients that trade in goods overseas, that this will be a wonderful solution. It has complete transparency. It doesn’t have the volatility as many of the cryptos do as you know, and it’ll be backed dollar for dollar. So, we’re very bullish on this,” Groome added.
Lipshitz predicts stablecoins to become a massive industry in the future due to its convenience of use as an efficient payment system. However, scalability is key in order to create the road for the mass adoption of stablecoins—and according to Lipshitz, BSV is just the train to ride that railroad.
“When we started, we’ve had a lot of experience with multiple protocols. When we started recently researching some token protocols on Bitcoin SV, we started to understand that there’s a huge potential to create further utility and further blockchain services using these token systems and using stablecoin, which we think can provide massive value,” Lipshitz related.
“So, if you’re going to join the rock train that’s going to reach mass adoption, this is the train… I think the correct term that we’re looking for is scalability. So, the cheap fees and the ease of use, they’re just characteristics of scalability. You’re not going to scale unless it is extremely cheap. For stablecoins to be compelling, they need to be as easy as paying in cash by hand, electronically. And we think that BSV has a compelling chance of reaching that,” Lipshitz pointed out.
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BSV continues to scale, which allows for the cheapest transaction fees, as well as the capacity to handle increasingly massive amounts of data due to its growing block size. BSV is releasing the Teranode project later this year, which serves to increase the network’s throughput by over 50,000 transactions per second. And this is just the beginning. With the goal of being able to process millions of transactions per second in the future, BSV is definitely the train to ride for mass adoption of stablecoins.
“This is all about payment processing at the end of the day, giving people fiat on ramps to get the stable token and then once they have the same stable token, you’ve basically eliminated the need for money transmitters and all the expense that comes along with that. So by using BSV, you create a very, very efficient payment processing network using stable tokens,” Dickson explained.