The techno-anarchist pioneers of cryptocurrencies believed they were creating a new form of unregulated, decentralised money. They couldn’t have been more wrong.

While Bitcoin and Ethereum did succeed in spawning a highly speculative alternative asset class that has come to enjoy wider use and popularity, the innovation that’s really set to challenge fiat cash is stablecoin: the less turbulent corridor through which investors reach volatile digital tokens.

Far from being an alternative to state-issued money, the likes of Tether and USD Coin are pegged to government-backed legal tender such as the dollar. These tokens allow investors to switch into and out of their cryptocurrency assets without having to interact each time with a bank wary of unwittingly enabling money-laundering, terror financing, child pornography or extortion hacking. Indeed, blockchain-based clones of national currencies started becoming popular as crypto exchanges took off in late 2017; many of them did not have licences to accept fiat money.

To continue reading,

Sign in to access this Premium article.

Subscription entitlements:

Less than $9 per month
3 Simultaneous logins across all devices
Unlimited access to latest and premium articles
Bonus unlimited access to online articles and virtual newspaper on The Edge Malaysia (single login)

Stay updated with Singapore corporate news stories for FREE

Follow our Telegram | Facebook