Will Social Media Lead Stablecoins into the Next Era?
Categories: GeneralPublished On: March 17th, 20213 min read
On a cold, mid-November day, the Federal Security and Exchange Commission (SEC) of the United States did something very few would think it would allow. It took many by surprise that the SEC would allow social media platform IMVU to essentially mint its own stablecoin, advising that they would “not recommend enforcement action” against the platform. This is a huge swing in the stance they took on Facebook’s proposed Libra Coin a mere couple (actually a bit more, but who’s counting) of months ago. Not only will they allow IMVU to issue its stablecoin, VCOIN, but it will also allow them to do not as a security — a key problem that has previously confounded blockchain backed projects who wanted to pass regulatory practices, such as the Howey Test in the US. While the legal and regulatory details can be a little complex, we wanted to take an alternative look at what this might lay the foundation for.
In today’s world, it is hard to move away from social media, it is as if we are drawn into a Black-Mirror-esque rabbit hole of infinite distractions. While most are engulfed by the endless swipes/scrolls from TikTok, Instagram or Snapchat, in reality there are hundreds if not thousands of smaller, more niche platforms which have a strong and dedicated following. These platforms, like IMVU, may be the perfect testing ground to see whether stablecoins can nestle themselves between a fake “token” economy and real monetary assets exchanging hands. Currently, most social media platforms offer some sort of in-game purchase that users can then use to either power up their hero, buy accessories, or give as gifts to live-streamers. But these tokens are useless outside the individual mobile gaming or social media ecosystem, and just as importantly are not pegged to any real collateral. This forces the social media companies to rely on third party providers like VISA or PayPal in order to allow their users to spend within their platforms. Of course, naturally this comes at a hefty fee both to the individual user, and the overseeing platform. Fortunately, companies like Stably, excel in providing top-notch stablecoin-as-a-service delivery to enterprises of many sizes and industries, now including social media platforms. Through Stably, they receive the technical support to integrate the new currency seamlessly onto their own platforms and also open up their customers to the blockchain economy.
For a company like Facebook, there is probably going to be way too much red tape, eyeballs and scrutiny for them to make a drastic move like this. But for smaller social media platforms and gaming companies like IMVU, this may be a perfect fit for them to provide simpler monetary access to their users. The adoption of stablecoins being used outside the traditional remittance railways, or as an on-ramp into crypto is still rare these days, as both individuals and organizations are still figuring out the best ways to implement stablecoins into their own ecosystems. Ultimately, it is safe to say that widespread adoption of privatized and customized stablecoins is inevitable moving forward, so why not take a minute and look at how you can possibly mint your own stablecoins to use within your ecosystem or plug into the crypto world!
To learn more about the benefits of using stablecoins and how they can improve your business operations as well as position you as a pioneer in the adoption of disruptive technology, reach out to us here. We will gladly walk your organization through the steps of building a stablecoin with our all-in-one solution. Whether it is the code, compliance, distribution, or marketing, we’ve got you covered.
Stably is a US-based FinTech providing fiat onramp and stablecoin infrastructure to digital wallets, decentralized applications, Web3 projects, and blockchain development organizations. Our mission is to power the next billion Web3 users with a superior fiat <> crypto onramp to all popular and emerging blockchain ecosystems.
RISK DISCLAIMER: Digital assets involve significant risks, including (but not limited to) market volatility, cybercrime, regulatory changes, and technological challenges. Past performance is not indicative of future results. Digital assets are not insured by any government agency and holding digital assets could result in loss of value, including principal. Please conduct your own thorough research and understand potential risks before purchasing/holding digital assets. Nothing herein shall be considered legal or financial advice. For more information about the risks and considerations when using our services, please view our full disclaimer.
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DISCLAIMER: Stably Corporation (“Stably”) is a blockchain and financial technology service provider, not a bank, with a registered address at 16192 Coastal Hwy, Lewes, DE 19958, USA. Stably Trading LLC (“ST”), a wholly owned subsidiary of Stably, is a FinCEN-registered money service business (MSB) with registration number 31000251219597 and a registered address at 10 E Pearl Ave Suite 200, Jackson, WY 83001, USA. Stably’s fiat orchestration partner, Bridge Building Inc. (“Bridge”), is a FinCEN-registered MSB with registration number 31000252673675 and a registered address at 1501 Hillmon St, Austin, TX 78704, USA.
Blockchain-connected products and services offered by Stably and ST are built on top of Bridge’s infrastructure via manual and automated integrations, leveraging its financial services including but not limited to: fiat custody, funds processing, virtual currency exchange, convertible virtual currency (CVC) administration—as defined by FIN-2019-G001—plus Bank Secrecy Act (BSA) and anti-money laundering (AML) compliance services. Bridge is not an FDIC-insured institution but it works with FDIC-insured banks to hold US dollars (USD).
Stably Ramp (“Stably Ramp”) is a non-custodial fiat-to-crypto on and off-ramp platform that enables a verified account holder (“User”) to mint/redeem stablecoins as well as buy/sell stablecoins and other digital assets using fiat and blockchain payment methods. Fiat payments are processed by Bridge and blockchain transactions may be processed by Bridge, Stably, ST, or LI.FI (“LI.FI”), a decentralized exchange and token bridge aggregator. Only Users whose identities and funding sources are verified by Stably, ST, and/or Bridge for compliance with its terms and policies, including BSA/AML programs, are allowed to mint/redeem or buy/sell stablecoins and digital assets with Stably Ramp. Deposits and disbursements to/from a Stably Ramp account to third parties other than the account User are prohibited.
Stably USD (also known as “Stably Dollar” or “USDS”) is a multichain stablecoin fully backed with liquid USD-denominated assets such as cash, cash equivalents, and/or stablecoins. The collateral assets are held by Bridge and/or ST for the benefit of verified USDS token holders, including white-label versions of USDS like VechainThor VeUSD. Bridge and/or ST are the CVC administrators of USDS and its white-label versions. USDS and its white-label versions are not FDIC-insured. Every USDS token, including its white-label versions, may be minted/redeemed 1-to-1 with USD or USDC according to Stably’s terms and policies, minus fees, through a Stably Ramp account.
Stably BTC (also known as “Stably Bridged Bitcoin” or “BTCS”) is a cross-chain Bitcoin (BTC) bridged token fully backed with BTC held by ST for the benefit of verified holders of natively-issued BTCS tokens. ST is the CVC administrator of BTCS. Every BTCS token may be minted or redeemed 1-to-1 with BTC according to Stably’s terms and policies, minus fees, through a Stably Ramp account.
Stably ETH (also known as “Stably Bridged Ethereum” or “ETHS”) is a cross-chain Ethereum (ETH) bridged token fully backed with ETH held by ST for the benefit of verified holders of natively-issued ETHS tokens. ST is the CVC administrator of ETHS. Every ETHS token may be minted or redeemed 1-to-1 with ETH according to Stably’s terms and policies, minus fees, through a Stably Ramp account.
Stably reserves the right to deny, suspend or terminate any User’s usage of Stably Ramp, BTCS, ETHS, USDS and its white-label versions, if Stably deems it advisable or necessary to comply with applicable laws or to eliminate practices that are not consistent with laws, rules, regulations, or best practices.
Digital assets involve significant risks, including (but not limited to) market volatility, cybercrime, regulatory changes, and technological challenges. Past performance is not indicative of future results. Digital assets are not insured by any government agency and holding digital assets could result in loss of value, including principal. Stablecoins (e.g., USDS, USDC) and bridged assets (e.g., BTCS, WBTC) involve additional risks, such as technical challenges, security vulnerabilities, reliance on third-party custodians, and dislocation of market prices relative to the underlying collaterals. Please conduct your own thorough research and understand potential risks before purchasing/holding digital assets. Nothing herein shall be considered legal or financial advice. For more information about the risks and considerations when using our services, please visit stably.io/terms-of-service.