Stablecoins are crypto assets pegged to the value of Fiat, bringing people the "best of both worlds". The most popular stablecoins are often pegged to the US Dollar, since it's the world's reserve currency. Some of them comply with regulations, further legitimizing the industry as we speak. With all of the benefits stablecoins provide, Fiat's prominence could be threatened in the long run. After all, it's much faster and cheaper to use a stablecoin than a credit/debit card. People could stop using Fiat currencies like the US Dollar or the Euro in exchange for a stablecoin of their choice.
This makes me wonder, will stablecoins replace Fiat currencies in the future? If not, why? Is there a possibility governments will adopt stablecoins as their own instead of launching digital currencies from scratch? Your input will be greatly appreciated. Thanks in advance.
Existing stablecoins are mostly either privately owned or created by a specific commercial entity. If they go bankrupt or disappear for any other reason, its holders will lose their money. Therefore, they are not suitable for states. States will only issue and use their own central bank stablecoins, that is, their digitized national currencies. They will replace conventional fiat currency, but they will not completely replace it. Neither the state, nor a significant part of the population will be interested in this.This makes me wonder, will stablecoins replace Fiat currencies in the future? If not, why? Is there a possibility governments will adopt stablecoins as their own instead of launching digital currencies from scratch? Your input will be greatly appreciated. Thanks in advance.
Going forward, it is possible that governments will ban private and commercial stablecoins.