The world has been slowly recovering from the COVID-19 pandemic, while some countries are bracing themselves for a potential second wave, but the economic downturn in many fields is imminent. This has spurred debates on the current model of a cash-based society, which claim that it had become outdated long before the crisis struck the world. The coronavirus has arguably accelerated the transition to digital cash and cryptocurrency adoption across the globe.
The tradition of using fiat currency has been on a path toward becoming obsolete, and cash as a financial instrument is about to become a relic of the past. While the new digital e-commerce powerhouse is in need of a better foundation layer, stablecoins may become the definition of a new kind of asset in the world of emerging crypto use cases.
The mobile onslaught on the global business market
While the advent of mobile technologies has mostly driven internet popularity during the last five years, the e-commerce sector has significantly benefited from this trend and has been developing by leaps and bounds thanks to the rising demand for online shopping. When global corporations such as Google, Samsung and Apple simplified payment methods using smartphones, mobile commerce started to grow faster than all other e-commerce industries combined.
Since 2015, the role of mobile apps in the e-commerce sector has been steadily increasing. As the data from Statista indicates: “In 2020, U.S. mobile retail revenues are expected to amount to $339.03 billion U.S. dollars.”
Numerous shopping apps have redefined the way people shop, and most of the sales will undoubtedly be generated by the mobile experience: It’s simply more convenient to place an order through an application than to spend time searching in the store.
The technological savior for merchants and others
Blockchain technology may not be the ultimate cure, but it has potential and use cases to help the e-commerce sector raise its evolution curve to the next level.
Recently, one of the world’s top e-commerce brands, Amazon, filed a patent for a new DLT-based system that tracks goods in its supply chain.
The blockchain’s firm ability to quantify trust and build a new kind of business relationship based on this principle can surely improve the performance of enterprise services platforms. The DLT-based tracking solution is designed to enhance supply chains from production to the final states visible to the user. Moreover, this model may also benefit market participants, such as manufacturers, couriers, distributors and end-users.
When it comes to e-commerce, the huge popularity of cryptocurrencies during the last few years now influences not only how people shop but also the financial instruments they choose. With more convenient interfaces in place, crypto ATMs sprawling globally, and institutions coming onto the scene, it’s only a matter of time before we witness mainstream acceptance.
The rising role of stable cryptocurrencies
While online technologies have helped societies change their shopping habits, DLT provides a much-needed upgrade in acquiring, remittances and corporate settlement sectors. For far too long, the existing financial system has borne burdens that have consequently spawned inefficiencies due to the constant involvement of intermediaries. Will distributed ledger technology and smart contracts replace the traditional financial system someday? Definitely — but it will take some time.
The perfect method of payment has not yet been established because paying for products and services with cash and credit cards is still common. However, cryptocurrency is the next big thing that will be used globally as the newest payment method of the 21st century. All we need to do is to evaluate the proper digital assets that can be widely used by people in e-commerce. Among the more than 5,000 cryptocurrencies in existence, Bitcoin (BTC) and Ether (ETH) perennially stand out from the crowd, which makes them early favorites to usher in a new era of payment methods. However, such assets can’t be regarded as a measure of value due to their constant volatility.
Stablecoins, created to take advantage of all digital decentralized approaches, have leapfrogged the imperfections of fiat currencies and the shortcomings of current financial systems; some of them have even been pegged to the dollar or euro to ease the volatility issues of traditional crypto. Most of these projects have failed over time because choosing an underlying asset is a complex task. Meanwhile, successful projects issued by private companies continue to operate despite the ongoing COVID-19 epidemic and the precarious global financial landscape.
Implementing cryptocurrencies into business ventures offers several advantages. For example, the commission on transactions and chargebacks will help companies to save money. Moreover, having full control over accounts without the influence of centralized entities, like traditional banks, allows businesspeople to better manage their funds.
Unlike credit card payments, stablecoins aren’t hindered by geographical restrictions and the need to open a traditional bank account. Therefore, cryptocurrency transactions between the buyer and the seller can be carried out from anywhere in the world.
In the foreseeable future, stablecoins might even change the role of national currencies into something that is regionally based but still internationally accessible. The financial ties among nations won’t simply be tethered to central banks but will eventually be in the hands of the general public.
Buying it easy
In our time, one doesn’t have to be a programmer to find out and experience the benefits of cryptocurrencies. During 2020, many companies have introduced safe, streamlined crypto gateways and options to buy digital assets with just a credit card. Getting a checking account in dollars or euros only takes a few minutes nowadays.
In only a few short years, we have witnessed a huge spike in technology’s global learning curve — from institutions recognizing Bitcoin’s value to the options of simplified crypto purchases, and from the digital dollar white paper to the digital yuan pilot projects. There is no doubt that the ongoing advances in technologies will bring a new quality of life sooner than we expect. The time has come to endorse stablecoins.
The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.
Gregory Klumov is a stablecoin expert whose insights and opinions appear regularly in numerous international publications. He is the founder and CEO of Stasis, a technology provider that issues the most widely used euro-backed stablecoins with a high transparency standard in the digital asset industry.