This chapter examines the shifting perceptions of Bitcoin and its evolution into mainstream finance, particularly with the rise of ETFs. It focuses on stablecoins, their reliance on traditional banking systems, and the systemic risks associated with them, contrasting them with other cryptocurrencies. The discussion also highlights the potential of stablecoins to facilitate peer-to-peer transactions and their growing use in regions with unstable banking.
Pretty much since the moment that cryptocurrencies came into existence, there's been a chorus of skeptics who argue that they solve no real world use cases, except for gambling and speculation. For a while, there was a lot of hype about things like Web3 or DeFi, but for the most part, these still remain in the realm of pure speculation and gambling. And so, the ultimate use case for crypto remains elusive. Our guest on this episode argues otherwise. He thinks that stablecoins, such as Circle or Paxos, which are backed by actual dollar instruments in regulated institutions running on public blockchains (like Ethereum or Solana) are solving a genuine problem in transmitting money, beyond just speculating on other cryptocurrencies. Austin Campbell is an adjunct professor at Columbia Business School and the founder of Zero Knowledge Consulting. He also comes with a long resume at both crypto and legacy financial institutions. He explains why stablecoins are having a moment and explains the problems they currently solve (particularly internationally) and why legacy payments infrastructure is unlikely to serve the same needs.
Read more:
The Case for Stablecoins Being the New Shadow Banks
How Stablecoins Became a Powerful Force in Crypto
Only Bloomberg.com subscribers can get the Odd Lots newsletter in their inbox each week, plus unlimited access to the site and app. Subscribe at bloomberg.com/subscriptions/oddlots
See omnystudio.com/listener for privacy information.