Stablecoins are rising in popularity, leaving many wondering what the future holds for this type of cryptocurrency. The growing number of brands developing or looking into branded stablecoins is also on the rise. But why? The utility of using stablecoins to process payments certainly makes sense for brands.
“For traders and investors, however, stablecoins address a problem that plagues many popular crypto exchanges around the world—the exchanges don’t have relationships with banks, meaning investors can’t use dollars, euros or other government-backed currency to buy the cryptocurrencies they want to trade,” Tomio Geron explained in a Wall Street Journal article.
However, there is certainly more to the enticing nature of a less volatile form of digital currency. Payment flexibility, price stability, and blockchain technology is supported by today’s stablecoins. But let’s not count out the cost cutting profits, YOY financial growth, marketing opportunities, and customer loyalty at stake for early adopting brands. And brands are certainly seeing the value.
Facebook is developing Libra, a stablecoin that could completely disrupt the financial space, opening up global payment pathways to its 2.41 billion worldwide user base.
This of course comes with a few security concerns, but Facebook isn’t the only brand on the blockchain. Walmart is also looking into its own branded stablecoin, hoping to follow in the development steps of Facebook’s Libra.
Branded stablecoins could ease cryptocurrency and blockchain technology adoption across multiple industries. “Today, with over 120 projects on the market, it seems that stablecoins may lead the mass adoption of cryptocurrency payments for which the industry ‘veterans’ have been waiting,” Tatiana Koffman said in a Forbes article.
In fact, the stablecoin industry could be valued at a trillion dollars within ten short years. So what’s the future of stablecoins? Branded stablecoins. Let’s take a closer look.
Facebook Libra and Walmart Branded Stablecoins
Stablecoins have been relatively “under the radar” when it comes to cryptocurrency. The recent stablecoin popularity has come on the heels of Facebook’s stablecoin Libra, and now Walmart’s application for a cryptocurrency patent.
P.H. Madore explained in a CCN article, “Is Walmart trying to compete with Facebook Libra? Will CEO Doug McMillon be hauled in before legislators to defend his company’s right to innovate? Will the token ever actually launch at all?”
It would appear that Walmart is interested in cryptocurrency, whether or not they intend to develop and launch a stablecoin is difficult to tell. They did state that the cryptocurrency may be supported by USD. As difficult to tell as it is, it would, however, make sense.
For instance, Walmart could become a payment system in itself, since they stated in the patent application that the crypto could serve up no to small fees. Walmart could also:
- Become the Bank of Walmart. Walmart believes that its low income customers could find a branded stablecoin easier and less expensive when compared to traditional banking alternatives. Walmart could essentially cover financial needs, and product needs under one roof for their customers.
- Eliminate the use of credit cards. With a Walmart branded stablecoin, the biggest enterprise retailer in the world could effectively make credit cards obsolete. The alternative would be fingerprint and retina scanning to make transactions.
Here’s a breakdown of those fees . . .
It does sound a bit futuristic, but stablecoins could be the future of payments. Facebook and Walmart could very well corner the stablecoin market with their forward-thinking approach to making cryptocurrency mainstream.
What are the Branded Stablecoin Benefits?
The payoff could be huge for brands that become early stablecoin adopters. From quarterly profits to marketing, there are a number of business areas where stablecoins can make a positive impact. These areas include:
- Large cryptocurrency reserves. A brand, like Facebook or Walmart, that releases its own stablecoin can easily convert coin for cash. This allows the brand to keep a large reserve of cryptocurrency, which in turn generates larger yearly profits.
- No more card processing fees. Brands typically pay two percent to five percent when a customer uses a card. When dealing with digital transactions that are peer-to-peer on a generally decentralized blockchain, the fees are zero to very low.
- Boost customer loyalty programs. By incentivizing customers with stablecoin, they can take customer loyalty programs to the next level. Using rewards and discount offers via branded stablecoins makes this very easy.
- New sustainable marketing opportunities. Just look at all the press Facebook and Walmart have received due to stablecoins. These brands don’t even have an actual digital coin available and the marketing opportunities have increased exponentially. Stablecoins and cryptocurrency also speak to the next generation of consumers and users.
The Next Generation Stablecoin is Around the Corner
Today’s stablecoin is Tether, USDS, PAX, and others, simply pushing the less volatile angle with the 1:1 ratio between digital coin and a fiat currency or commodity. However, this generation of stablecoin is almost over. The next generation will maintain the non-volatile benefit, but also be heavily branded and come with a lot of new utilities like rewards, exclusive features, and potentially meta-stablecoins.
So the future of branded stablecoins is “branded” stablecoins themselves. Brands are beginning to see that the less volatile cryptocurrency could lay the foundation for many of the original crypto utilities we’ve all been waiting for. It will certainly be exciting to see how stablecoins disrupt nearly every industry in the decade to come.
The Future of Branded Stabecoins was originally found on Blokt – Privacy, Tech, Bitcoin, Blockchain & Cryptocurrency.
First Mover: The FOMO Takes Over as PayPal Play Sparks Bitcoin Rally to $13K
Bitcoin (BTC) was higher, following through on the upside after Wednesday’s 7.4% jump to a new 2020 high. It was the biggest single-day increase in almost three months.
The surge past $12,000, with prices now around $13,000, came after the consumer payments giant PayPal announced it would allow its 346 million customers to hold bitcoin and other cryptocurrencies, and to use the digital assets to shop at the 26 million merchants on its network.
“Traders are now eyeing for BTC to test the $14,000 long-term resistance from 2019, which we believe should be breached in the coming months ahead,” Lennard Neo, head of research for the cryptocurrency-focused structured-products firm Stack Funds, wrote early Thursday in a report.
In traditional markets, European indexes slid and U.S. stock futures pointed to a lower open as lawmakers in Washington failed to agree on a new economic stimulus package as data showed a rising number of coronavirus cases.
The official confirmation Wednesday that PayPal was pushing into cryptocurrencies (reported months ago by CoinDesk’s Ian Allison) ignited a fresh rally in prices for bitcoin, already seen as one of the world’s top-performing asset classes this year.
And it might be the fear of missing out, or FOMO, that now pushes bitcoin prices even higher.
“Big moves can trigger periods of pure FOMO,” Matt Blom, head of sales and trading for the publicly traded cryptocurrency financial firm Diginex, wrote Thursday. “Sophisticated traders are definitely aware of the opportunity.”
The FOMO instinct might be especially strong as the coronavirus-infected economy relegates Wall Street stock and bond traders to hoping for trillion-dollar stimulus packages just to keep asset prices from falling.
“Markets are pretty aggressively priced,” said George Pearkes, global macro strategist at Bespoke Investment Group, told Bloomberg News.
Bitcoin appears to get uplift from new stimulus announcements, since many cryptocurrency investors see it as a hedge against inflation. But digital assets also get the benefit of the doubt as a new technology that might revolutionize the financial industry, or as a form of payment that might find adoption from Argentina to Nigeria.
“This coalescing of fintech and bitcoin is yet another bullish development for investors,” Zac Prince, CEO of the crypto lender BlockFi, told CoinDesk in an email.
With just a couple months left in 2020, the largest cryptocurrency is on track to outperform — by far — pretty much every other major traditional asset class, from stocks to bonds to gold. It would be the second year in a row that’s happened.
Bitcoin prices, which doubled in 2019, are now up 80% so far this year. That compares with 6.3% for the Standard & Poor’s 500 Index of large U.S. stocks and a 27% increase for gold.
“It’s the sheer scale of PayPal’s reach that is attracting the headlines,” Jason Deane, an analyst for the foreign-exchange and cryptocurrency analysis firm Quantum Economics, wrote in a report. “This could well go down in history as a watershed moment, the point at which bitcoin goes properly mainstream.”
Such speculation might just be hype, sheer folly, a bubble mentality. Or it might be inevitable. Or all of the above.
– Bradley Keoun
Bitcoin’s price rally looks overdone, as per technical indicators. However, these metrics often trap investors on the wrong side of the market and are unreliable.
The cryptocurrency jumped to 15-month highs above $13,200 on Wednesday after online payments giant PayPal added support for bitcoin and other cryptocurrencies. At press time, bitcoin is trading near $13,000, representing a 20% gain for the month.
The 14-day relative strength index (RSI) is now hovering above 70, indicating overbought conditions. The RSIs on the 4-hour and hourly charts also show the price rally is overdone.
But other measures show that the latest price level might have staying power.
Data extracted from the Bitcoin blockchain show a surge in inflows to cryptocurrency exchanges, typically a sign that sellers are queuing up to sell. According to the blockchain intelligence firm Chainalysis received a total of 106,519 BTC on Wednesday, the highest daily inflow since Oct. 2.
Even so, prices are holding up, signaling there’s also a strong bid from interested buyers. It’s not unprecedented: A similar spike in inflows was observed Sept. 4, but the cryptocurrency rallied to 15-month highs.
All things considered, the price rally is likely to continue.
– Omkar Godbole
Read More: Above $13K: Bitcoin Unfazed by Profit Takers After Rise to 2020 High
Litecoin (LTC): Paypal’s decision to support litecoin on its platform may sit at odds with the community, but its helped boost its value over the last 24-hours.
Digital-asset brokerage Voyager Digital agrees to buy French crypto exchange LGO, will issue 1M shares (currently around 50 cents each) for the acquisition and undertake token merger (CoinDesk)
DeFi yield-farming platform Harvest Finance doubles total collateral value locked to $704M in one week, unseating decentralized derivatives exchange Synthetix (CoinDesk)
Popular cryptocurrency options exchange Deribit will require all users to be ID verified before end of year (CoinDesk)
Crypto exchange Kraken officially restarts trading operations for Japanese customers (CoinDesk)
U.S. commodities-market regulator issues advisory to brokers on how to look after users’ digital currencies in segregated accounts, part of “holistic framework” (CoinDesk)
Nigerian bitcoin peer-to-peer trade volume grows amid rising tensions over alleged police corruption, as locals look for easy ways to send remittances and shelter savings from inflationary domestic currency (CoinDesk):
The latest on the economy and traditional finance
More than 5,000 job cuts at Hong Kong airline Cathay has left local real estate market reeling (Bloomberg)
U.S. stimulus package unlikely to pass before Nov. 3 election, Goldman Sachs says (CNBC)
Mere prospect that the Federal Reserve might intervene in bond markets is keeping U.S. Treasury yields close to historic lows (Bloomberg)
More than half of all small- and medium-size businesses in Europe are fearful for their survival in next 12 months (Reuters)
Alibaba to buy more than a fifth of fintech giant Ant Group’s potentially $35B IPO (Bloomberg)
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Ethereum Gains 6% Intraday, Sets Sights For 2020 Higher High
Bitcoin shocked the finance world yesterday rocketing more than $1,000 to over $13,000 per BTC at the high. Today, Ethereum is following suit, with 6% already on the books and a chance to soar much higher is here.
Here’s what to watch for in ETH and the signs to watch for if the Bitcoin soak up all the limelight, and has followed the top cryptocurrency’s showstopping pump yesterday with a rally of its own.
Related Reading | Crushing Bitcoin Dominance Could Decimate Altcoins Through Q1 2021
Following a breakout from an inverse head and shoulders bottoming pattern, Ethereum has already risen 6% intraday from low to high, all while Bitcoin has pulled back
Ethereum breaks out from bottoming formation, targets retest of 2020 highs | Source: ETHUSD on TradingView.com
Another 2020 Higher High Could Be Next For Top Ranked Ethereum’s outperformance of Bitcoin on the USD pair can also be reflected in the duo’s ratio. On the ETHBTC trading pair, Ethereum has also gained over 5% on the day against the leading crypto asset by market cap.
Bitcoin set a new 2020 high yesterday but has still come up short of setting a higher high over the 2019 peak. Ethereum, however, has done so, and another higher high in 2020 would point to a continued uptrend into the next year.
Top-ranked altcoin begins to overtake Bitcoin on ratio | Source: ETHBTC on TradingView.com
Both top crypto assets benefitted enormously from yesterday’s reveal that PayPal would soon support them, alongside Litecoin and Bitcoin Cash. With both Bitcoin and Ethereum looking this bullish, and other altcoins following, a new crypto bull market could finally be brewing.
Featured image from Deposit Photos, Charts from TradingView
Franklin Templeton Join Series A For Institutional Bitcoin Custody Provider Curv
Curv, an institutional crypto asset custody provider, today announced that global investment firm Franklin Templeton and fintech-focused venture capital firm Illuminante Financial Management have joined its Series A funding round — which already included CommerzVentures, Coinbase, Digital Currency Group, Team8 and Digital Garage.
“Curv is driving traditional institutional and crypto native demand for digital assets through multi-party computation (MPC) security technology, a critical requirement to safely transfer, store and manage any digital asset on any blockchain or DLT,” according to a press release shared with Bitcoin Magazine. “Their solution is used by dozens of institutions across the globe, including Franklin Templeton, which plans to leverage Curv’s infrastructure to expand into the burgeoning digital asset market.”
- Curv uses a cloud-based wallet to manage digital assets, including bitcoin, on behalf of institutions. It also insures up to $50 million of digital assets for clients
- The release credited a recent announcement from the U.S. Office of the Comptroller of the Currency allowing nationally-chartered banks to custody cryptocurrency for clients and similar announcements from other regulatory bodies with encouraging traditional financial institutions to collaborate with Curv on managing crypto assets
- “The addition of Franklin Templeton is a barometer of the traditional industry’s shift into digital assets and a broader desire to bring public blockchain-based offerings to market,” Curv CEO Itay Malinger said, per the release.
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