Stablecoins x CBDCS The duel of who will be the Verdadero ‘Digital Dollar’ (Image: Gemini Pro)
The approval of Genius Act, that regulates the stablecoins in the United States, put the last shovel of lime in the development program of a “digital dollar”, a potential CBDC (Central Bank Digital Currenciesor digital coins of central banks) issued by the Federal Reserve (Fed, the US Central Bank).
However, if both the Stablecoins and a CBDC of the US currency has the same goal-that is, to be a virtual representation within blockchain of dollar – What is different between them?
Here’s the similarities and differences between them and then a summary of each of them:
| Stablecoins | CBDCs |
| Issued by companies or entities | Issued by centralized entities (such as central banks) |
| They are a token that seeks to maintain 1: 1 parity with a real world asset (eg USDT has parity with the dollar) | They are the representation of a country’s digital money (eg Drex is the real digital) |
| Has limited emission in relation to your treasure | Has virtually infinite emission |
| Can be found in public blockchains | In general, they are restricted to systems developed by the government (permitted blockchains) |
Stablecoins: The ‘Privatized’ dollar
Starting with stablecoinsthey are nothing more than ballast cryptocurrencies in real -world actives – which may include coins or commoditiesas is the case with gold tokens.
The best known broadcasters are the Tetherfrom the USDT (USDT)and the Circlefrom the USD COIN (USDC)together, they represent approximately 85% of the global Stablecoins market of US $ 251.681 billion, according to the Defi Llama.
Even before the Genius Act – which still needs a few steps before it is effective – these companies were already conducting periodic funds audits. In other words, for each token issued there is a dollar equivalent in the treasury of these companies.
This “dollar equivalent” can be both in currency and more liquid assets, as US Treasury titlesfor example.
The positive point of this type of asset is that it is issued by a private and audited entity and is present in the main networks (blockchains) From the planet, and can be negotiated on the main platforms.
To the stablecoins are also not subject to external rates, like IOF and other taxesbesides those in the network itself.
It is worth mentioning that these tokens are used to reduce their own negotiating rates (swaps) among cryptocurrencies because they are a reference in recognized and safe assets, such as the dollar.
The negative point is that any company or protocol can issue a token as stablecoinincreasing the chances of scams and crimes involving cryptocurrencies. Therefore, it is important to pay attention to the reliability of the entity of that currency.
CBDCs: the new wave of the central banks
Already the CBDCs It is nothing more than the digital representation of the currency issued by the Central Bank. Several countries, such as China And Brazil itself has been developing ecosystems of “state cryptocurrencies”.
And calling “ecosystems” is no exaggeration. In the Brazilian case, the Drex (Real Digital)It is one of the most advanced CBDC projects in the world and the BC itself defines it as “Drex ecosystem.”
This is because Drex is the currency of an ecosystem that seeks to allow a number of financial interactions, such as purchase of government bonds, contract settlements, purchases of goods, such as real estate and vehicles, and so on.
According to the BC, this ecosystem is being developed in the Hyperledgera blockchain permitted from the network Ethereum (ETH).
Because it is a project of colossal size, the concern for safety is the cornerstone of the development of these projects. Therefore, these networks are often closed and limited to a specific space – in other words, it is not possible to negotiate the token in any network, as with Stablecoins.
Another negative point has to do with CBDCs to be issued by central banks, which goes against the initial idea of cryptocurrencies to be a market apart from the traditional financial system. It may seem like technicity, but it displeases and drives many investors and enthusiasts from the crypto world.
On the other hand, CBDCs are an easier way to introduce cryptocurrencies in the daily lives of the population – as a form of investment, tax payment and so on. In addition, these projects have the reliability of the central banks.
And why didn’t the United States create a digital dollar?
Early in the management of US President Donald Trump, he ruled out the development of a “digital dollar” CBDC. Sources heard by Crypto Times understand that this is a strategy of new US management, with two main objectives.
The first of these is to encourage the private cryptocurrency market, which would encourage the development of new projects in the field of digital assets, keeping the enthusiasts in the sector aligned with President Trump.
Another point is that dollar-backed stablecoins increase the demand for currency and US debt securities, strengthening US presence in the virtual environment. Read more here.
Source: Moneytimes
I am an author and journalist with a focus on market news. I have worked for a global news website for the past two years, writing articles on a range of topics relating to the stock market. My work has been published in international publications and I have delivered talks at both academic institutions and business conferences around the world.
