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Can Central Bank-Backed Digital Currencies Replace Stable Coins?

future of stable coins

Along with the bull run in the cryptocurrency market, stable cryptocurrencies have also recorded huge growth. So much so that as of the first week of 2021, total value of stable cryptocurrencies has exceeded $ 31 billion.

With a market capitalization of $ 23.6 billion, Tether (USDT) stands out as the most popular stable cryptocurrency. Tether’s Sunday share among stable cryptocurrencies stands at 75%. In second place is USDC. USDC dominates 14% of the stable cryptocurrency market with a market capitalization of $ 4.5 billion.

Of course, with the rise in cryptocurrency market, need for stable cryptocurrencies is growing. The fact that the market value of stable cryptocurrencies outperforms many popular cryptocurrencies is the clearest indication of this. After impressive growth in the cryptocurrency market, important steps have been taken on the front of governments.

Globally, as regulation of cryptocurrencies nears an end, the US Bureau of currency control’s office (OCC) recently made an extremely exciting decision, announcing that it has granted national banks permission to use stable cryptocurrencies.

All these developments raise the question: in the future, can Central Bank-backed digital currencies, which we call CBDC, replace stable coins? In latest episode of the Unchained podcast, ConsenSys CBDC consultant Matthieu Saint Olive stated that with the launch of CBDCs, stable coins could not be preferred as a value storage tool.

Matthieu Saint Olive stated that some stable coins will continue to exist with CBDCs due to their niche uses.

CBDCs have not yet fully entered our lives, but it is known that many governments are working in this direction. In many countries, especially China, Japan, Switzerland, France, Sweden and Turkey, Central Bank-supported digital currency (CBDC) is being worked on

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