The sudden explosion of stablecoins in the past few months has been a milestone in cryptocurrency development. It’s helped mitigate concerns over a Tether implosion and has opened up channels of liquidity into cryptocurrency ecosystems for investors and everyday users alike.
Stablecoins bring fiat stability to crypto channels and are a necessary step in the evolution that will bring cryptocurrencies to the masses much to the chagrin of some crypto enthusiasts. For some, stablecoins are nothing but extensions of fiat, for which they have pejoratively coined the word “fiatcoins.”
The idea that a cryptocurrency project begins and ends with its initial vision is not only territorial and myopic, it also goes against the very notion of decentralization. Cryptocurrency is a movement in flux. It is not a hard-coded set of ideals enforced by a group of people who must approve the movement’s direction.
One example is the rhetorical movement to defend “Satoshi’s Vision.” The original intent of Bitcoin has changed and morphed as people have interacted with it and built upon it. Leveraging a subjective interpretation of “Satoshi’s Vision” is a means of preventing people from adding their own ideas to Bitcoin’s advancement.
Stablecoins are by no means created in the image of decentralized currencies such as Bitcoin, nor do they try to accomplish the same things. Stablecoins are the competitive market’s response to failures of current crypto arbitrage and regulation. They may live alongside Bitcoin and may, in fact, help Bitcoin live out its decentralized destiny by adding more players to the market.
Stablecoins may be the on-ramp people are looking for, another step on the path to bringing crypto to everyday people who don’t necessarily care about the cypherpunk ideals of decentralization. This does not threaten Bitcoin; fiat-collateralized stablecoins by definition cannot threaten the ideas of decentralized consensus and a fixed monetary supply.
Even if stablecoins end up failing, and they very well might, their creation proves that rapid development in this space is happening. At the heart of cryptocurrency is the idea that anyone can build atop a protocol layer, companies included. Stablecoins may turn out to be nothing more than a fad, but that’s exactly the point. This is advancement of the cryptocurrency movement, and only the best ideas will survive.