Governments are already allocating more resources to keep up with the current trends. This month, the United States President’s Working Group on Financial Markets issued a report explaining the many processes in place to guarantee that stablecoin regulation adheres to official rules.
According to the Bank for International Settlements’ (BIS) global central bank survey, 86 percent of central banks are actively involved in some manner with central bank digital currencies (CBDCs), a sort of stablecoin guaranteed by the government.
According to the Atlantic Council CBDC tracker, seven central banks have now formally formed CBDCs, with 17 more in the testing phase. Stablecoins, like all cryptocurrencies, employ blockchain technology to enable peer-to-peer (P2P) digital transactions, giving them the bearer-instrument and final-settlement characteristics of cash.
This underlying decentralized architecture offers faster transactions, lower legal fees, greater transparency, and improved control for end users. Several public and private sector entities have built numerous fragmented blockchain networks.
Stablecoins must be able to function across several platforms in order to be genuinely useful. Building one-time bridges to accomplish this is now excessively expensive and risky for developers of new stablecoins like as Dai (DAI), TerraUSD (UST), and USD Coin (USDC).
For the market to continue developing and adapting, a worldwide interoperability network that securely connects all blockchain networks is essential. These universal interoperability solutions will also help CBDC and stablecoin developers avoid the costs and security risks associated with one-time implementations.
Stablecoins and other digital assets cannot attain their full potential on walled networks. Interoperable design solutions will enable stable assets to play an important part in many countries’ economic transitions by lowering the costs of cross-border transactions, remittances, and supply chain management.
Interoperability solutions can help with digital asset deployment across blockchain networks and CBDCs.
