Are Stablecoins the Future of Finance?
With the rapid growth and adoption of stablecoins, it can be said that more and more businesses are looking at this avenue of creating a branded stablecoin for their company. Why stablecoins? There are many purposes of a stablecoin and one being cost savings. A good example is money remittance. Remitting money across the globe has always been expensive due to a high percentage of fees. With stablecoins, it will reduce the remittance fees of an average of 7% to 1-3%. Together with other benefits of stablecoins, we can see big corporations looking to implement their own branded stablecoins. Here are some big corporations looking into stablecoins.
The retail giant first sparked interest with stablecoin back in 2019. And in 2020, Walmart filed for a blockchain patent. Walmart’s purpose of creating a stablecoin comes from wanting to “Bank the Un-Banked.” There are still many unbanked people in the United States, and Walmart hopes to provide a secure place of storage for everyone. Walmart envisions a scenario in which the perks of holding their branded stablecoin will far surpass fiat currency. To Walmart, banks give interest to savings, but the new Walmart stablecoin will provide discounts to groceries, auto parts, glasses, and everything else Walmart offers. Furthermore, Walmart spends billions every year on transaction fees from companies like Visa, which charge 2-3% per transaction. Creating and accepting their stablecoin will save Walmart an estimated $8 billion per year. What company would not want to save 8 billion dollars?
Being one of the biggest in the world, it is no surprise that JP Morgan is constantly finding innovative ways to stay ahead of the game. Thus, it should come to no surprise that JP Morgan announced its interest in developing a stablecoin called JPM Coin in 2019. Running on a private blockchain, the creation of JP Coin is to address the complex challenges of cross border payments and help simplify its clients’ money moving needs through next generation corporate treasury services. JP Morgan is further in talks with 400 different institutions around the world to integrate with their JP Coin private blockchain in hopes to gain huge adoption.
Microsoft has always been optimistic about blockchain and its use cases. Microsoft has been offering its blockchain as a service to companies looking to adopt blockchain technology into their traditional businesses. In 2020, Microsoft announced the development of a blockchain ecosystem for the Xbox community. This blockchain lets community members create digital art in games and ease transactions between community members. These transactions cannot occur without a stablecoin to facilitate them. Development on this project has just started, so it’s only a matter of time before you will be able to see the results.
In 2019, Facebook announced releasing its own branded stablecoin called Diem (Previously called Libra) to be a universal currency tied to a basket of sovereign currencies such as USD, Euro, SGD, and more. However, due to regulations, the plans of Diem have since change into opting for multiple “stablecoins” backed one-to-one by different government-backed currencies, as well as one multi-currency coin. Based on the latest news, Diem could be possible launch in Q4 of 2021.
What all of these companies have in common is they have recognized that stablecoins are an essential part of the future of their business. This is a sign for other business owners to integrate stablecoins sooner rather than later. If you have questions about implementing a stablecoin in your business, contact us at https://www.stably.io/contact/.
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