Cryptocurrency market: Stablecoins won’t be so stable

Stablecoins have gone from an obscure corner of cryptocurrency market to near the center of it. Major institutions, such as Mastercard, are now trying to create alternate payment networks based on stablecoin and crypto.

I am rooting for such efforts to succeed, but in the meantime I have news for you: Stablecoins aren’t always stable. Unlike a lot of critics, however, I view fluctuating prices for stablecoins as not only acceptable but also desirable.

The potential for stablecoins is obvious. Imagine if software, using crypto, could circumvent some of today’s banking and financial institutions, and all of their attendant costly bureaucracies. You could send remittances at lower cost, make payments more quickly, and receive a higher return on your deposits, at least if the transaction technology can be improved. Underlying these systems would be blockchains, with the coins pegged to dollars on a one-to-one basis by reserve backing. In fact, such assets already exist, and they are growing rapidly.