January 23, 2020

Can stablecoins be recognized in traditional financial systems?

Christine Madeleine Odette Lagarde (President of the European Central Bank) quite recently, at the end of 2019, supported the idea that stablecoins are  the opportunity for crypto business to succeed, moreover, institutions should not be on the side of all digital assets, but rather take the initiative.

Certainly stablecoin is not a Bitcoin, it is  a common name for cryptocurrencies, but importantly, they are subject to fewer fluctuations, in contrast to typical digital currencies. Nevertheless, from the fact that they are tied to stocks of ordinary currencies, and even physical units, they can be recognized in traditional financial systems

The value of stablecoins

Words of the president of the bank may seem contradictory, but in her further comments, she indicates how valuable stablecoins-crypto tokens are. She also noted that such coins are indeed more ground-breaking than regular bitcoins. It all comes down to the fact that such digital currencies can bring many more benefits to society.

Stablecoins are, by the way, a great option for those, who are one of the most heated opponents of Bitcoins, since such a currency is a new technology, tied to recognized assets by only half.

They have several advantages, one of which is the speed of transactions, trouble-free cross-border payments of assets based on the blockchain, against the background of which they can be cost-effective. Also, due to its nature, it can be used by electronic devices, which greatly simplifies the payment system.

How could stablecoins сhange the entire tax landscape?

What unites politics and marijuana? The answer is simple enough to a new bill (AB 953) that will allow California to accept money transfers to cannabis through a stable currency. There are great prospects in the field of taxation, due to the wide popularity and popularization of digital coins. That’s why Ben Bartlett, the first city council member, decided to buy cannabis in California, using Bitcoin Cash (BCH) and Universal Stable Coin Dollar (UPUSD), Bartlett’s purchase “took a few seconds and led to a significant reduction in the transaction fees for the dispensary “. In this connection, alongside, the local government received a cashless transfer of taxes.

Even though cannabis is still the subject of prohibited activities (legalized for recreational use in the state of California), it was in this state that cannabis sales were increased by $ 3.1 billion, in connection with which the fact that the government is inclined to this type of payment is justified.

What happened in the course of this illustrative situation: instant payment, tax collection occurs instantly, no visit to an ATM, no security risk, therefore, crypto protection seems to be an ideal tool for transactions in this area and the rest.

The most important thing is that the process of developing this type of payment has already begun so that it is accessible to all people in the future. The California government also emphasized that accepting stablecoins is an opportunity to implement a profitable and transparent tax collection process.

What does the future hold?No one can answer this question, but due to huge technologies and progress already in the financial sector, stable currency is a breakthrough, this is a new opportunity for an improved and simplified life, these are assets that are used just like regular currencies, which can be saved, exchange and, of course, use. Yes, it can take a very long time, but the most important process has already begun and we are waiting for a new world with cashless payments.

Disclaimer

This article is intended as a news item to inform our readers of various events and developments that affect, or that might in the future affect, the value of the cryptocurrency described above. The information contained herein is not intended to provide, and it does not provide, sufficient information to form the basis for an investment decision, and you should not rely on this information for that purpose.

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