Seen some Qs lately on stablecoins vs cryptocurrencies (BTC, ETH, XRP). First and foremost: it’s very clear that these technologies are complementary, not competitive. It boils down to these points for me 👇🏾
What stablecoins offer: 1. Immutable standards - ERC-20, XRPL IOU, etc. Innovative financial services can be built off of these standards without having to worry about breaking API changes, downtime, etc.
2. Fiat on and off ramps to the broader ecosystem - when banks adopt stablecoins, they connect the crypto ecosystem to local rails thus providing a piece of the puzzle that historically has been missing.
3. Wallets can now be used to custody fiat and crypto - thus providing broad based access to banking services to the underserved across the world. It’s now possible for global populations (banked or not) to hold non-domestic fiat currencies such as USD.
What stablecoins don't offer: 1. Trustless systems - you're trusting the issuer (private enterprise, bank, etc) to have reserves (specifically for fiat-backed).
2. Interoperability - if issuers all create their own stablecoins, you’re recreating the same system. Counterparty free assets like BTC, ETH, XRP are imperative for cross-chain settlement.
3. Frictionless user experience - most stablecoins require an onboarding process, review of personal credentials, and active transaction monitoring.
The 3rd OCC letter outlining how banks can operate public blockchain nodes and use stablecoins for payments shows that this isn’t an either/or for public blockchains vs stablecoins -- it’s further validation that global payment systems should be able to utilize both.
• • •
Missing some Tweet in this thread? You can try to
force a refresh
Customers have told us time and again that access to capital is the biggest barrier to growth. Scaling quickly is a must. If you’re an incumbent w/ a large balance sheet, that’s easy. Startups/SMEs/eCommerce companies unfortunately lack the resources to do the same. 1/5
Now, customers using On-Demand Liquidity can use Line of Credit, which provides upfront access to capital through a single credit arrangement - simplifying access to solutions that let you scale, enter new markets and reach new customers. 2/5
#RippleNet customers use one XRP-based arrangement w/ flexible repayment that works everywhere #ODL is available, regardless of sending destination or local currency, and costs less than traditional providers. 3/5
It’s been a wild few weeks in crypto! OCC has greenlighted banks to get involved, #Bitcoin hits $12,000, DeFi is booming, futures products are soaring, and adjusted txn value for stablecoins hit an all-time high. And this is just a fraction of the news… (1/7)
What’s one common denominator here? Likely global uncertainty with fiat currencies, and many in the crypto industry focusing on utility, beyond just speculation. Examples like Dodgecoin aside, there’s a new, growing focus on an asset’s use case, its tangibility. (2/7)
We’re seeing a melding of the old world and new. It’s only a matter of time before banks offer custody services, acquire companies with those capabilities, and potentially even offer crypto lending as they see consumer interest in DeFi. (3/7)