At Blockchain, we’re committed to doing more than making it easy to speculate on crypto assets. We’re here to build a better financial system that allows billions across the globe to access an open, fair and accessible future while retaining financial sovereignty.
We believe stablecoins play an important role in delivering on that vision, by enabling the use of crypto for day to day economic transactions without the fear of price volatility, and could act as a tipping point into wider crypto adoption.
Last year, our first major research report analyzed the rapidly growing world of stablecoins. The report took a detailed look at the strengths, trade-offs and concerns associated with all 57 active stablecoins, using a new data set that included previously non-public information.
Today, we’re excited announce the release of the 2019 State of Stablecoins report. The 2019 report builds on its predecessor to provide an updated and expanded look at the current state of the stablecoin market - a space where we expect to see significant innovation in the coming years. It includes:
- New research primers on three leading stablecoins: Paxos Standard, Stasis and Reserve;
- A new in-depth comparison of Paxos Standard, USD Coin and Gemini Dollar;
- Expanded data profiles on 34 stablecoins, including many new stablecoins (the report is twice the size of its predecessor!);
- Refreshed data and analysis across the full report to reflect the substantial changes observed over the last six months; and
- An overview of how to gain investment exposure to the growing use of stablecoins
View Point Summary
- While there is a great deal of excitement surrounding stablecoins, the technology is still nascent and further experimentation (and innovation) is expected
- As we correctly forecasted in our last report, some of the enthusiasm for algorithmic stablecoins has at least temporarily dampened due to the exit of Basis and growing concerns over whether some stablecoins can successfully navigate legal uncertainty and securities laws
- Due to the aforementioned design uncertainty as well as regional factors (e.g., local regulations), we continue to believe that space exists for approximately 5-8 significant stablecoins in the short to medium-term; our view here received some validation in Q4 2018 with the reduced dominance of Tether
- Stablecoins continue to be more complementary than competitive with other cryptocurrencies like bitcoin or ether, with many stablecoins relying on the security, compatibility and infrastructure provided by such cryptocurrencies
- Stablecoins will continue to see an increase in listings on more cryptoasset exchanges, and these listings will be motivated for reasons beyond reduced exposure to market volatility (e.g., algorithmic stablecoins may prove popular to list as they could attract ‘Soros-attack’ trading - and significant trading volume - aimed at breaking the automated stability peg)
- Key near-term regulatory issues include whether stablecoins (or aspects of stablecoin systems) are in compliance with securities and money service laws in some jurisdictions
We hope you find this report interesting and informative. We look forward to sharing more of our team’s research in the future.
You can read the full report or take a look at the summary slides at blockchain.com/research.
-Blockchain Research Team