With Bitcoin touching an all-time high this week at $57,000+, critics were quick to point out Bitcoin’s unprecedented rise as a sign of its fluctuating value. With Bitcoin’s biggest criticism often working against it as it bids to become the first global currency, supporters of cryptocurrencies have begun shifting to stablecoins, a relatively newer kind of digital currency that promotes exceptional security in payments and also holds a stable value. Stablecoins achieve this by pegging their value to a fiat currency.
In an exclusive interview with Blockchain expert and author Rohas Nagpal, The Coin Republic aimed to explore the future of Bitcoin, the rise of Stablecoins and Facebook’s controversial Libra Project ( Presently Libra Project is changed to Diem Project). The following are some of the excerpts from the interview conducted by our community manager, Abhiruk Bhattacharyya.
Abhiruk: Numerous complaints state that if cryptocurrency is banned in India, the country will lack payment interface expansion. Do you think it can happen any soon?
Rohas: I strongly believe that even if India bans crypto, the country will not lack the expansion of the payment interface. India already has several brilliant payment mechanisms like UPI, IMPS, NEFT, and the costs they charge are virtually zero. The transactions are done within seconds with absolutely no chance of failure. And the World cannot use Bitcoin for everyday transactions because the crypto asset price is too volatile; moreover, it may surge or plunge in a wink of an eye.
Abhiruk: Is Bitcoin price volatility its major demerit?
Rohas: With the passing years, the number of speculators has also grown in Crypto markets. On the other hand, Bitcoin was created to be an alternative medium of exchange, But, at present, the World observes it as an investment to increase the capital. Moreover, bitcoin is entirely in the grip of investors. And till the time speculators do not leave the market, Bitcoin will continue to showcase price volatility.
In such a situation, the Rise of Stable Coins is also significant. The biggest disruption will be Facebook’s DM Project, which is likely to release soon. The ecosystem that Facebook will build will be a severe threat to the Government’s Fiat System.
Abhiruk: Can you brief us about Facebook’s Libra Project?
Rohas: When Facebook initially allowed the Libra Project, a company creating its own money, there was a lot of resistance. Many governments spoke against the project. Later Facebook changed the project’s name and called it the DM project. They only aim to issue stable coins against the US Dollar, Singapore Dollar, Japanese Yen, and EURO.
In today’s era, Facebook controls the thoughts and emotions of Billions of people. Imagine receiving money through DM; why will somebody ever need to convert that DM into rupees if they can buy and sell things on Instagram using the DM project. Facebook’s DM Project will enable people to send money anywhere in the World in the wink of an eye. Moreover, the virtual transactions will be free, which means the transaction fees would almost get eliminated.
It would create a parallel virtual country, where millions of people will regularly earn and spend money. Moreover, the government would not tax it anymore, but Facebook may do it via transaction fee. If such a situation is encountered, private companies will become very powerful. It is a pretty significant threat about which the World is not concerned.
Abhiruk: How Are The Governments Reacting To The Libra Project?
Rohas: The governments are utterly silent on the matter. Moreover, Facebook has completely changed the project, and they simply aim to issue stable coins against the US Dollar, Singapore Dollar, Japanese Yen, and EURO. Facebook’s upgrade has made it difficult for countries to say anything against the project.
Abhiruk: You mentioned stable coins while talking about the Libra Project. What makes them different from Bitcoins, and do you think they have a bright future?
Rohas Nagpal: Stable coins are significantly less volatile compared to other cryptocurrencies. And, when a real-world asset backs a cryptocurrency, the concept is called a Stable Coin.
Yes, stable coins have a bright future, and the governments may soon accept them as a replacement for Fiat Currency. At present, cross-country payments take a lot of time; moreover, many problems are encountered, such as massive transaction fees. Adoption of Stable Coins will improve the condition and reduce the problems to zero. Moreover, it is transparent, and transactions take place within seconds.
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