Introduction to Stablecoins
The global payment system is often criticized for being outdated, but the reality is that it is broken. With banks charging an average transfer fee of 13% to send just $200 across borders, and the process taking up to two days, it’s clear that the system is in need of a major overhaul. This is not just a matter of cost or efficiency; it’s a tax on individuals and businesses that can least afford it. In this article, we’ll explore the rise of stablecoins and how they are revolutionizing the payment landscape.
The Rise of Stablecoins
Stablecoins have come a long way since their humble beginnings as a $4 billion niche in 2020. Today, they represent a market of over $250 billion, with analysts forecasting an annual payment volume of over $1 trillion by 2028. This growth is not just limited to the financial sector; stablecoins are being used in a wide range of applications, from cross-border payments to machine-to-machine transactions. With the ability to regulate themselves in seconds and cost less than 1%, stablecoins are eliminating the friction that has long plagued the traditional payment system.
Breaking Down Payment Barriers
Stablecoins are breaking down payment barriers in several ways. For one, they are reducing transfer costs from 6-13% to less than 1%, making it more affordable for individuals and businesses to send money across borders. Additionally, B2B settlement cycles that once took 59 days are now being completed in real-time, eliminating the need for lengthy and costly settlement processes. This is not just a matter of speed and cost; it’s about creating a more efficient and equitable payment system that benefits everyone involved.
The Benefits of Stablecoins
So, what exactly are the benefits of stablecoins? For one, they offer a high degree of programmability, allowing for real-time salary statements, automated insurance, and machine-to-machine payments. This is not just a matter of convenience; it’s about creating a more streamlined and efficient payment process that reduces the risk of errors and delays. Additionally, stablecoins are providing a new level of clarity and legitimacy to the payment landscape, with laws such as the Clarity Act and the Genius Act cementing their place in the financial system.
Real-World Applications
Stablecoins are not just theoretical; they are being used in real-world applications right now. For example, Bitso, a Mexico-based exchange, processed over $12 billion in transfers last year, with the majority of those transactions being completed in real-time. This is not just a matter of speed; it’s about creating a more efficient and equitable payment system that benefits everyone involved. Additionally, stablecoins are being used in consumer payments, with stablecoin-linked debit and credit products quadrupling in just two years.
The Future of Stablecoins
So, what does the future hold for stablecoins? According to analysts, stablecoins will continue to grow in popularity, with some predicting that they will represent 25% of the US financial cost accounting and 10% of the total US money supply by 2030. This is not just a matter of growth; it’s about creating a more efficient and equitable payment system that benefits everyone involved. With the ability to unlock over $27 trillion in idle capital, stablecoins have the potential to revolutionize the global financial system and promote economic development worldwide.
A New Era of Programmable Money
The true breakthrough of stablecoins is not just their speed or cost; it’s their programmability. With the ability to create intelligent contracts, money itself is becoming an intelligent infrastructure. This means that workers can be paid in real-time, hours, or even minutes, and connected devices can process machine-to-machine payments without human intervention. This is not just a matter of convenience; it’s about creating a more streamlined and efficient payment process that reduces the risk of errors and delays.
As Kevin, co-founder and CEO of Keyrock, notes, stablecoins represent the most important upgrade to money in decades. With their ability to eliminate friction, reduce costs, and increase efficiency, stablecoins are poised to revolutionize the global financial system. Whether you’re a individual, business, or financial institution, it’s clear that stablecoins are here to stay. For more information, visit https://crypto.news/if-you-touch-money-youll-eventually-touch-stablecoins/
Kevin on the way is a co-founder and CEO of Keyrock, a global crypto investment company that was founded in 2017. Kevin has committed digital assets for the development of the utility for the entire financial spectrum for almost a decade. His insights into the development of tokenization and institutional adoption are regularly presented in leading global publications, including the Financial Times and Bloomberg. With a background to business engineering and international management, Kevin worked as a strategy consultant for Roland Berger for several years.
