Stablecoin Cryptocurrency War Is Coming – Facebook, Visa, Circle, Banks & Governments Around The World
Stablecoin Cryptocurrency War Is Coming – Facebook, Visa, Circle, Banks & Governments Around The World
- By: Frank Makrides
- Updated on December 6, 2020
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There is a silent war brewing for your money and spending. The stablecoin cryptocurrency war is coming and most people are not even aware of it. In this article, I will dive into what a stable coin is, why there is a war brewing, to begin with, who the players are and how it could affect you.
What is a stablecoin?
A stablecoin is a digital currency, usually in a blockchain that is either backed by a central back currency, commodity, other digital or cryptocurrencies, algorithms or some combination of the above to provide a stable value to the inherent asset so it can be used for transactional purposes.
To learn more about blockchain technology and the cryptocurrency coin that started it all, please watch my YouTube video on Bitcoin and read my detailed article “What is Bitcoin“.
Who are the players currently on the stablecoin battlefield?
Facebook’s stable coin project and digital wallet
Facebook shook the world when it announced that it planned on launching a payment network using a consortium it helped to create called Libra. It has made many revisions and has dealt with a lot of government pushback since its first announcement.
Since then it was backed off a lot of its initial ambitions and even has done a recent rebranding, calling the stablecoin Diem. Facebook plans on launching Diem as early as January of 2021 with its digital wallet called Novi. Facebook owns and controls the wallet Novi, but claims it that Diem is controlled by a consortium.
Diem for right now seems to be backed up directly by the US dollar and could also be backed up in the future by other central back currencies.
Facebook’s plans are not totally clear as they keep pivoting, but from what I can piece together it looks as if they plan on integrating their wallet and stablecoin onto their platforms. This will enable domestic and cross border payments on the wallet using the Diem stablecoin currency.
Visa is partnering with Circle for cross border business payments
Circle, a fintech company has a suite of stablecoins it has created backed by central bank currencies like the dollar and euro.
Circle has recently joined the Visa Fintech Fast Track program to provide new capabilities and opportunities for business and corporate payments. The goal is to accelerate stablecoin adoption, using Circle technology and Visa’s partner network and user base.
The Circle Visa Corporate card that was recently announced will provide Circle’s dollar backed stablecoin USDC to more than 60 million merchants worldwide that accept Visa. Circle is the first fintech cryptocurrency company to announce a Visa corporate card.
Governments investing and launching their own central bank-backed digital currency (CBDC)
The Bahamas lead the way with their first nationwide CBDC but many more are either in soft launches, testing or coming soon. This includes China, Russia, Thailand, England, the United States and many more countries being announced all the time.
To put a stop on third party stablecoins, keeping the control to central banks and governments, a recent bill was proposed in the US to ban stablecoins not approved by the government.
This has been such a hot topic it was even discussed at the G7 recently as well.
So how does this affect you?
Pros
CBDC is seen as some as a tremendous convenience. This leverages blockchain technology, providing a true digital ledger of all transactions. It also makes the management of money and spending it a lot easier.
Cons
This is seen as another system of control by banks and governments. They will now have complete oversight of every cent, every transaction, who has how much and so much more. This amplifies privacy, data and freedom concerns.
Predictions
I think the proverbial genie out of the bottle. Stablecoins are here and they’re to stay. In what form, how will they be used or who will have the control, only time will tell. It is more important that you educated and top of these trends from a fundamental investment, personal and business transaction standpoint. Understanding these new trends and being aware of what’s coming is important, especially when it comes to your hard-earned money.
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Frank Makrides
Is a former financial technology industry executive, licensed realtor, real estate investor, an award-winning speaker, has been published, holds multiple patents and is passionate about all things personal finance and entrepreneurship. He is also a proud husband and father of 2 amazing children.
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