CBDC and stablecoins: the big losers of the future in cryptoadoption?

CBDCs claim a much more prevalent place than other cryptocurrencies. Stablecoins, on the other hand, are seen as a true bridge between crypto and fiat currencies. Still, their use in cryptoadoption would be far from beneficial.

Use not recommended?

While most governments are wary of cryptocurrencies, two digital assets have been identified as a solution that can drive adoption. CBDCs and stablecoins, which combine the best of cryptocurrencies and fiat currencies, could actually be the assets preferred by the public.

But for Jorge Sebastião, co-founder of EcoX, Vít Jedlička, president of Liberland, Adam Greenberg, co-founder of Nova Finance and Joseph Beverley, founder of Neobills Consulting, it would be good to reflect on their true benefits. During a conference held at the Paris Blockchain Summit on July 8, the four experts found several disadvantages of them.

For example, CBDCs can be used in the same way as a fiat currency, but are under the influence of the authorities. Banks and governments can give themselves the right to confiscate them. However, their usefulness should no longer be discussed. As for stack coins, their case is a little more complex. Algorithmic coins, for example, are still too young to be used. Stablecoins linked to a pre-existing currency have also been shown to be volatile in times of economic crisis. These are therefore not without risk.

Diversification would be the secret behind adoption

Cryptocurrencies and digital currencies generally have their advantages and disadvantages. It is therefore impossible to focus on a single asset without taking risks. For Jorge Sebastião, it is important to diversify investments as well as applications.

To avoid getting stuck with volatile, confiscated or plunged assets, we should diversify the mix. We should therefore avoid favoring only Bitcoin, CBDCs, stablecoins, real estate or even gold. Among them, gold, real estate and crypto are the most reliable. We have seen that Bitcoin is much more reliable than stack coins or CBDCs because it is resilient to crises.

Excerpt from Jorge Sebastião’s speech at the Blockchain summit in Paris

Moreover, for the four experts, gold or fiat money are not the most sustainable assets in the long run. Cash flow problems or shortages can quickly become problematic in the case of widespread adoption. Cryptocurrencies, on the other hand, are not subject to scarcity and can be easily generated. The impact of such an action on the global economy and on possible inflation was not discussed.

There is still mistrust of cryptoadoption

If Bitcoin finally seems to be the preferred currency for mass adoption, its volatility will continue to fail it. Similarly, user behavior remains unpredictable in the event of a crisis. Last month, we were able to witness the wave of panic that caused investors to sell their coins. The phenomenon had greatly contributed to the decline of cryptocurrencies. Unfortunately, the pattern can always recur after mass adoption and lead to a much larger crisis.

Either way, for the four experts, trust remains the war tendon. If crypto is to be adopted, it must provide reliable and solid assets. Freedom and service must take precedence over the profits that the great men of the industry want. If the latter succeeds, it can return power to the people of the world and enjoy great success.

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