Can Stablecoins And Central Bank Digital Currencies Coexist?

The payments landscape is constantly changing, and needless to say, for the better. We have witnessed a rise in cryptocurrencies, as they continue to evolve and develop in today’s modern and highly-digitized new world. 

With the rise of stablecoins and Central Bank Digital Currencies (CBDCs), 2020 witnessed a highly competitive landscape developing.  Both private and government sectors were eager to focus on crypto-fiat hybrids. It is easy to compare the rise of CBDCs to other cryptocurrencies. However, these function more like dollars, and are fully-regulated under a central authority. 

Stablecoins helped create CBDCs and CBDCs have definitely grown in recent popularity. More and more central banks are announcing their plans to launch a digital currency of some type. Knowing this, I think in the years ahead, we will see more tension build up between stablecoins and CBDCs. All wise governments will eventually create their own digital currency. So, what will stablecoins do to stand out in this arena? 

As well, I wonder if stablecoin projects will begin to see pushback from the government. If a CBDC comes to fruition in the United States, will all the stablecoins pegged to the US dollar stand a chance? While their value may be connected to the US dollar, their success will be measured by the number of people who use them. 

If stablecoins begin experiencing more government intervention, I think CBDCs may seem more appealing to the average consumer. Either way, we’re bound to see some growing pains. Personally, I think stablecoin projects that are backed by decentralized assets like Ethereum will have a better chance of succeeding. 

What do you think about this? Will stablecoins and CBDCs be able to coexist?