Stable coin, which defined assets with monetary values and is poised against the price of physical ones like a commodity, has been gaining interest lately, The former U.S. Treasury Secretary Lawrence Summers commended stablecoins but still see a far coming to reality ending for blockchain technology.
In Circle’s CEO Jeremy Allaire’s podcast called “The Money Movement.” He also added that there is more innovation in the blockchain space but ut still needs to undergo development and full growth.
The comments were about the reflection on the present situation of the global economy, the future of a global digital currency, and the role of stablecoins in cross-border deals. Part also of the discussion was an affirmation of Sumers that there will be innovation and it will come in many forms, but the most evident is a stable coin. From his point of view, the case for cryptocurrency lies on three foundations, but two fail to make strong arguments in favor of the technology.
First, people will still put trust in traditional money. There will still be value for this. According to him, one must never undermine the central banks struggling to hit their inflation targets, under pressure from emerging debts and the crisis brought by the pandemic. “Second, there will still be restrictions in at least one place in the world about bitcoin usage. Besides, Summers weighed that some people still do not consider the privacy of data as a basic human right. Governments will want a few financial privacy over time and they will get what they wish for.
The strongest argument for anyone who will use crypto is that digital currencies have enough capability to give myriad of uses, particularly because traditional transactions are burdensome and costly, Inconvenient fees on cross-border transfers in card payments and ATM withdrawals were evident in the surplus of friction and inefficiencies of the current payments system. Through the help of stablecoins, there is now a cross-border exchange with more ease and convenience.
Currency Status Just a week after Summers’ notes, the dollar reached $1 billion in the market. Circle also reported an increase in demand for stablecoins, despite Summer’s comments. Yuan in the new era? In relevant news, governments are threatened to these cryptocurrencies since it can be“accessed using any digital wallet in any device, anytime, anywhere.
Thus, discussions regarding China’s desire to play an even role in the world economy were pushing them to create a digital yuan and one that is not controlled by any West company. Secretary Summers insinuated that China wants to control the lives of their citizens, including their financial lives. In his view, a system that allows countrymen to practice democracy in wealth and resources management makes the government nervous. This type of control, he said, would not be about digital currency anymore.