Stablecoins have a big advantage over CBDCs

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New York, New York – (Newsfile Corp. – December 20, 2021) – Recently, a major online meeting was hosted by Alchemy Pay. During the meeting, Simon Johnson, former IMF chief economist and now entrepreneurship professor at MIT, expressed his belief in the future of stablecoins during a recent discussion on decentralized finance. In a conversation with Alchemy Pay CEO John Tan, Johnson cited the cheap, borderless transactions that stablecoins offer global tech companies like Google and Meta. He said: “I think big tech will be drawn to stablecoins – which are not the same as central bank digital currencies.” CBDCs, controlled by national governments, will not provide the same borderless appeal to the Internet economy in which companies do business on a global scale. Johnson added: “I think Stablecoins have a big advantage over CBDCs if they organize themselves properly.”

At the online meeting, Tan represented the Blockchain Infrastructure Alliance (BIA), recently founded by blockchain networks; Alchemy Pay, Polygon, NEO, NEAR and Conflux. The organization seeks to optimize decentralized finance by funding research, projects and blockchain initiatives. The exchange was the first in a series hosted by the BIA, which aims to encourage social awareness and debate about the potential impact of blockchain on finance and society.

In recent years, stablecoins, such as Tether and USDC, which exploit blockchain technology, have become a major part of the cryptocurrency economy due to their ability to facilitate cheap and instant transactions through borders while remaining linked to the value of fiat currencies. , like the dollar. Despite the disruption this causes to global finance, Johnson was not concerned about the future of stablecoins. Asked about the possibility of strict regulation, he said: “I see no attempt to ban them outright.” Tan explained that by bringing the members of the BIA together, they intend to create a platform for constructive discussion between industry and regulators around the world.

In 2018, alongside other MIT professors like Gary Gensler (now President of the SEC), Professor Johnson co-authored an influential article titled “The Impact of Blockchain Technology on Finance: A Catalyst for Change “. As an expert who has now spent years working for a more socially conscious financial system, Johnson was encouraging about the BIA’s mission. Johnson told Tan that the BIA is forcing mainstream finance and big tech to improve what they offer to society: “The really good thing about what you and your coworkers do is you put pressure on you. on the big financials and big tech companies to really grow. their game. ”

While it is clear that the payments space is changing profoundly, it remains to be seen whether it will be dominated by the current banking industry or new centralized intermediaries, or truly decentralized systems like bitcoin. Johnson described bitcoin as “completely and utterly decentralized” but observed that it had yet to materialize as a medium of exchange. Regardless, on peer-to-peer transactions, Johnson described the arguments for their emergence as “fairly obvious and compelling.” Alchemy Pay aims to make cryptocurrency work like a currency and has implemented a payment solution that integrates crypto and fiat for instant and low cost transactions.

Asked by Tan what he sees as the main barriers to DeFi adoption, Johnson’s response revolved around consumer confidence and regulation. He said that while people know DeFi can offer great returns on investment, they remain cautious of new financial instruments. The public needs time to build confidence and to see the industry go through stressful times.

The BIA focuses on identifying and overcoming the obstacles that hinder the development and growth of blockchain finance. By bringing together principled industry leaders, the belief is that the public will be reassured, leading to faster adoption. In terms of regulation, Johnson said that while “overwhelming rules should not be imposed,” he believes the DeFi industry “must come within the regulatory boundaries in a reasonable manner” if it is to become a force in society.

These will undoubtedly become increasingly important topics for social debate in the years to come as blockchain emerges as a catalyst for major change. The Blockchain Infrastructure Alliance can focus on the ethical benefits of decentralization, but it is also up to society as a whole to work for a fair and transparent financial system that improves people’s lives.

The full discussion between Professor Johnson and John Tan can be watched on YouTube.

The views, suggestions and opinions expressed here are the sole responsibility of the experts. Do your own research before making a financial decision related to a crypto company or asset.

Alchemy Pay
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