Starting with Twitter, Stripe will enable companies to pay their customers using cryptocurrency in the latest example of the growing acceptance of digital assets by significant financial institutions throughout the world. The stablecoin USDC, which is minted
by crypto startup Circle, will be accepted by the $95 billion online payments giant starting Friday. To keep their value constant, stablecoins are digital tokens tethered to fiat currencies. In USDC’s instance, the cryptocurrency is backed by the U.S. dollar,
as the name indicates. This payment mechanism will be implemented by Twitter initially.
After a lot of speculation about a possible acquisition by Tesla CEO Elon Musk, the social media platform will begin distributing some of the money it makes from its premium Ticketed Spaces and Super Follows services to a select group of artists on Friday.
After discontinuing bitcoin support four years ago, this is Stripe’s first major foray into the crypto world since then.
With bitcoin’s reputation for wild price fluctuations and inefficiency in day-to-day transactions, this San Francisco start-up no longer accepts payments in bitcoin as of January 2018. When it comes to crypto, the company has subsequently warmed to it because
a new technology called “Web3”, which advocates for a decentralized internet based on blockchain. Last year, a team at Stripe was created to study cryptography and Web3.
What Is The Future Of Stablecoins?
It’s safe to say that when people think about cryptocurrencies, bitcoin is still the first thing that comes to mind. And the volatility of bitcoin is what most people think of when they think of the currency. However, there is one area of the crypto market
that is growing more and more prominent and apparent (though not necessarily for the correct reasons) – stability.
Even though stable coins are on the rise, many investors nowadays are still interested in investing their money in Bitcoin, which is still the most popular digital asset. Because of that traders seek ways to make their trading more efficient. One of these
ways is to start trading with the use of
Bitcoin Prime, which is an AI-based tool that allows customers to fully automate the trading processes. With the use of Bitcoin, Prime clients can analyze big data and generate their strategies.
As far back as 2013, law-abiding individuals were barred from using bitcoin exchanges by banks. As a result, “stablecoins” have taken the position of banks in the crypto business. Simply put, a stablecoin is a digital dollar stored on a decentralized ledger.
Simply said, the value of a $1 stablecoin is $1. For volatile assets like bitcoin and ether, it’s easy to exchange this currency. On the other hand, it provides crypto investors with a solid, cash-like asset that they can store in their portfolios (i.e., ignoring
Stablecoins may even pay interest on occasion. To date, this is my favorite illustration of the power of unanticipated outcomes. Blockchain technology was seen as fascinating by the banks, which invested in various innovation incubators and accelerators.
To counter the growing threat of cryptocurrency transactions being blocked, they increased their efforts in the background. As soon as the crypto revolution began, banks were ready to put an end to it. Instead of weakening crypto, they made it stronger by
requiring the introduction of stablecoins.
Now worth $134 billion, the stablecoin market has helped crypto become even more self-sufficient and less dependent on other parties.
Are Stablecoins Future Of Payments?
It seems that some decision-makers are increasingly coming to believe that only a digital currency that is fully backed by totally secure and liquid assets can be successful. If there is legal and operational confidence that liquid assets are available to
pay the claims of stablecoin holders’ demands, it should reduce the risk of stablecoin holders.
However, locking up secure and liquid assets in a stablecoin structure prevents them from being used for other purposes, such as helping banks meet regulatory obligations to maintain adequate liquidity. Disruptive shortages of secure and liquid assets might
result from this. Historical private banknotes, such as those from the United States’ Free Banking Era, are inspirations for stablecoins. There were a number of issues with these forms of private money, mainly because the issuers and the assets they were backed
by were of questionable and diverse quality. Individuals who dealt with privately issued banknotes had to decide whether to accept a given note at face value since they were non-fungible.
History implies that stablecoins may face the same issues as private banknotes during the Free Banking Era since they are based on the same economic principles. We now have a well-functioning banking and payment system thanks to central bank efforts throughout
the previous century. Tokenized deposits may take advantage of this. The concept of tokenized deposits is simple, despite the fact that many practical issues must be addressed.
Deposits made using tokens indicate a claim on the commercial bank of the depositor. Banks’ role in the payment system has been highlighted in recent studies. As stated in the PWG study on stablecoins, they should be issued by banks that are insured.
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