Y Combinator, a startup nurturing company, recommends working on stable coins

9 months ago 49

“Stablecoins will become important in the future”

On the 14th, startup incubation company Y Combinator announced a list of areas it would like startups to work on. “Finance using stable coins” is also listed as one of the recommended areas.

Y Combinator is an incubator that has previously backed Airbnb, Coinbase, Dropbox, and more. Brad Flora of the company explained the future of stablecoins as follows:

It seems clear that stablecoins will be an important part of the future of money.

The companies we have developed are effectively incorporating stablecoins into their operations for a variety of uses, including international payments, reducing transaction fees, avoiding fraud, and protecting users' savings from hyperinflation. This is why we see the potential of stablecoins.

He also opined that traditional finance will likely follow this trend. One example is that payment giant PayPal has issued its own stablecoin.

Last August, PayPal launched a stablecoin called PayPal USD (PYUSD) using the Ethereum (ETH) blockchain.

This is the first stablecoin issuance by a major global company, and is expected to encourage the entry of large companies into Web3 and promote competition in the stablecoin market.

connection:
Analysis of PayPal's new stablecoin issuance, industry evaluation and future impact

What is a stablecoin?

Refers to a virtual currency whose price is always stable. Stablecoins are a type of crypto asset that, unlike volatile assets such as BTC, ETH, and XRP, are backed by currencies such as the US dollar and aim to maintain their value. In addition to stable coins backed by the US dollar (USDT/USDC), there are also stable coins that use algorithms.

Virtual currency glossary

“Huge opportunity for stablecoins”

Flora points out that more than 500 million people worldwide live in countries where inflation is over 30%, and that U.S. banks hold $17 trillion (approximately 2,550 trillion yen) in customer deposits. , also argued that the opportunity for stablecoins is huge.

Relative to the size of the opportunity, he continues, there are currently only a small number of major stablecoin issuers and liquidity providers.

The number of financial institutions getting involved in stablecoins has been increasing in recent years.

For example, a subsidiary of French banking giant Société Générale launched the euro-denominated stablecoin EUR CoinVertible (EURCV) in December last year. In the same month, Deutsche Bank's DWS Group and others also announced that they would establish a company to issue euro-denominated stablecoins.

connection:
A major French bank issues its first stablecoin “EURCV” on Ethereum and lists it on Bitstamp.

connection:
Deutsche Bank DWS to issue euro-denominated stablecoin with Galaxy Digital and others

In Japan, in November last year, Mitsubishi UFJ Trust and Banking, Progmat, and JPYC began joint discussions on expanding the issuance of the stable coin “JPYC (trust type).”

“JPYC” is a Japanese yen-based stablecoin that began issuing in January 2021, and is positioned as a “prepaid payment instrument” under the Payment Services Act.

connection:
JPYC plans to partner with Mitsubishi UFJ Trust and Progmat to expand stable coins and enter the domestic and international SC exchange industry