The role of cryptocurrency in payments and financial services continues to take shape, and the outline continues to look more and more like the future is leaning heavily toward the implementation and usage of stablecoin. Two articles this week bolster this notion with Bloomberg reporting on Tuesday that stablecoin powerhouse Circle Financial, issuer of USDC, is in active talks with investment bankers to go public in 2024, and an interesting report from Business Insider on Thursday, describing an abrupt “about face” from equity markets perma-bear, and one of crypto’s heretofore fiercest critics, Nouriel Roubini, aka Dr. Doom, whose investment firm, Atlas Capital, now plans to launch its own stablecoin, Atlas Climate Token. In contrast to Circle’s USDC stablecoin which is pegged to the U.S. dollar, the Atlas Climate Token will be pegged to “a carefully chosen portfolio of liquid real world assets.”
The takeaway here for investors, payment companies, regulators, consumers, merchants and banks, is that the divergence between cryptocurrency, the asset, and cryptocurrency, the secure, tokenized (stable) store of value, and thus, reliable unit of account, continues to strengthen. This is in large part due to the volatility of crypto, the asset. For example, within the context of money movement and payments, it matters not whether in 10 years the price of the mighty Bitcoin equals $100K or zero. However, if its price volatility continues to be a feature, Bitcoin, and its asset-like cohort, will very likely not be utilized as a world-wide currency.
Side Note
There was another story this week that bolstered the narrative of the strengthening divergence between crypto, the asset, and crypto, the currency, and that was Ripple’s announcement of its launch of Ripple Payments, a rebrand of RippleNet with greater interconnectability, compliance controls, and liquidity. Though the headline was the growth and global reach of Ripple’s proprietary blockchain network, allowing for the movement of crypto and tokenized fiat anywhere, anytime, for very little cost – a compelling value proposition to enterprise corporates, especially those that require cross-border payouts. The story also underscored the strengthening divergence narrative because the underlying technology that’s truly providing value for payments and money movement is not crypto asset being employed, but the infrastructure on which it runs – the blockchain-based “rails” and “train stations”. And to that end, greater efficiencies can be achieved by using the stablecoin cohort (tokenized fiat and/or high quality liquid assets), whose lack of volatility ought to eventually remove the fiat/crypto conversion friction point.
