There are currently more than 100 unique stablecoins in existence, almost double the number compiled by Blockchain Research last month.
Blockchain entrepreneur Edan Yago has partnered with Stable.Report to spearhead analysis of this space and uncover the biggest opportunities and challenges set to emerge over the coming years.
“With the volatility of cryptocurrencies rendering them impractical as mediums of exchange, stablecoins are quickly emerging as a viable alternative to bring crypto to the masses,” they observe.
“Backed by traditionally stable assets such as gold or the USD, stablecoins provide all the benefits of digital currencies, with the stability required for use as a daily currency. This has resulted in an explosion of interest within the sector, with new projects emerging on a weekly basis.”
A need for collaboration
With the rapidly growing ecosystem showing no signs of slowing, collaboration will be essential to driving mass adoption.
83% of survey respondents believe that collaboration between stablecoin projects will be beneficial to an industry that 42% state will be worth over $100 billion in three to five years. 65% of respondents identify industry partnerships as being an immediate priority for their projects.
Growing concern over reputation
89% of respondents are concerned about collateral and reputational damage to the ecosystem caused by failed stablecoins. 87% believe transparency is pivotal to the success of their stablecoin projects.
Industry governance
83% feel monitoring and governance by independent experts would benefit the stablecoin ecosystem. They ranked consumer protection (67%) and standards and quality assurance (57%) as the two highest priorities.
Yago is developing a decentralised governance model to address fears surrounding reputational damage to the ecosystem caused by failed stablecoins.
“The incredible growth seen in stablecoin projects, and the amount of money in the stablecoin ecosystem, has taken everyone by surprise, but it’s a clear indicator of a strong need and desire for cryptocurrencies with low volatility. We can look forward to seeing many more projects emerge in this space over the coming months, catering to many different types of customers and use cases,” he says.
He adds: “We’re truly entering an age of digital financial revolution, but there is still more work to be done. The next stage in the development of the stablecoin space is to build a unified, decentralised ecosystem. For stablecoins to reach their true potential, we need to ensure interoperability so users of any stablecoin will be able to spend their money anywhere, with any merchant, for any purpose.”
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.