CBDC Vs Stablecoins
The future of money became uncertain from the inception of cryptocurrency. The era was indeed changing, there has been proof that transactions can move way faster than earlier reckoned. A three second global transaction is attributed to the Hive chain. How about that?. government at first where fighting but along the line they've switched to embracement although not ALL countries are yet up to the understanding of what is going on. We have to admit the government is known for one thing; control.
Maybe this is why some governments are not ready to buy this idea. And on the other hand, a reason why advanced ones are incorporating. There is going to be a huge influx of monitored cash flow, something that makes it easy for taxations. revenue will increase as much money flows into the digital realm.
Can one account for how much Real world asset tokenization alone can do?. So how will the government be stepping in? First, expect it to be centralized. This is where the future of CBDC or Stablecoins steps in.
source
At first I thought the central ⇪ digital currency× (CBDC) would lead the charge. The underlying fact was that these tokens will be directly issued by central banks; something that is to their huge favor. Central banks and government are like 5 and 6. From here we can easily say the old ways just in blockchain realms. Maybe I was a little hasty to reach conclusions.
Who uses money most, government or merchants? The latter have a hedge. Money is a means of transactions, something that entrepreneurs and businesses do more often. From here it seems CBDC may not thrive. The fact is that it will remain a local currency and because of this, it will be rigid.
It will not help in easy global transaction living international businesses stranded. Let's take for instance, can someone in Nigeria easily accept the Japanese Yuen as a settlement for business? A difficult one, he will have to look for ways to make the necessary conversion; a stress it stands. This is where stablecoins steps in. Would a Nigerian accept US dollars to settle international transactions? Yes, this is not because he actually love the USD but rather, the US Dollar remains the unit for global settlements.
source
So the difference remains this, CBDC will remain a national currency while Stablecoins settles global transactions, which will scale. The answer remains, why have the US government sided for Stablecoins rather than a CBDC USD?. Firstly, they have a hedge, it is their currency that settles most global transactions, something that should not be undermined.
The US economy will boom through this as dollar gains more strength. This is why President Trump and his cabinet have pushed for the Genius acts.
This comparison shows that CBDC on the long run will die down while Stablecoins will be seeing influx in the trillions within a few years. Does this mean other crypto will die off? Of course not, intra-platform payments will still occur. Let's take for instance Hive and HBD, we all know how this pairs work, one is used mostly for platform activities (HIve tippings) while HBD mostly settles financial economy of a pegged dollar. To be even more precise, funding will be flowing into the crypto industry through this.
To conclude, let me add, green light is showing up for Stablecoins against CBDC. No one saw this coming, the fate was that crypto currency like Bitcoin will be leading the way. It has become a store of value (digital gold) and the price is still counting. Adding to that, we can't ignore the need of global unit of transactions. Virtually is taking over, digital business operation has come to stay and blockchain tech is leading the charge. merchant dominance sides completely with stablecoins unless proven Vice later. A big room for USDT to thrive as first inception Stablecoins offerers, fortune is shining on them.
Posted Using INLEO