This excludes the projects’ own crypto-assets from circulation and has an extremely negative impact on the implementation of the plans of blockchain architects and their communities.
“Stablecoins have become mainstream financial instruments, competing with established means of payment in traditional finance. They are clearly good for both money availability and inflation protection. However, how good this is for the implementation of the development plans of the blockchains themselves remains in question,” said Megan Nyvold, head of media at the BingX exchange.
Against the backdrop of stagnation of mutual settlements in native cryptocurrencies such as Bitcoin or Ethereum, the use of stablecoins continues to grow, say Innovation Circle experts. The rise in popularity of stablecoins pegged to the dollar and other currencies challenges theories long believed by cryptocurrency enthusiasts, namely that projects’ native tokens could become a medium of exchange in their own right.
“Stablecoins have become parasitic free riders that exploit the security of blockchains without giving anything back. Industry experts tend to think that stablecoins destroy the very possibility of using cryptocurrencies as a medium of exchange,” the Innovation Circle believes.
Tether previously announced that over the past month, its USDT stablecoins worth more than $4 billion were issued on the Tron and Ethereum blockchains.
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