Stablecoin is considered the most vital innovation in the crypto world because it provides decentralized capabilities from the transaction side.
Founder of Coinmetrics and Principal of Castle Island Ventures Nic Carter, made the statement at the Permissionless event by Blockworks.
Permissionless Event Discusses Stablecoins
He expressed his views that the government cannot provide what stablecoin innovations offer.
This statement was conveyed by several high-ranking officials in the crypto world, such as’s CBDC Head Visa, Catherine Gu, MakerDAO Sam MacPherson, and Frax Founder Sam Kazemian.
The event was also supposed to welcome TerraDo Kwon over the ongoing stablecoin case, but he didn’t attend.
This discussion concerns the condition of USTerra, which is falling below $1 to $0.1 out of its status as a stablecoin.
In response to this condition, negative sentiment also affected many stablecoins, but one stablecoin stood firm, namely USDC. Circle, the company responsible for USDC, stated,
“Our way of working is very tedious; the system is straightforward, based on fiat money. Users give 1 US Dollar; we give 1 USDC and vice versa.”
USDC became one of the topics discussed in this event because of the drastic difference between UST from Terra.
Because the USDC stablecoin system is a traditional stablecoin, UST uses an algorithmic stablecoin system.
Traditional stablecoins are stablecoins based on fiat money, whereas algorithmic stablecoins are based on tokens or coins tied to them in terms of value.
Terra’s Destruction Was Predicted
Nic Carter also stated that Terra was a project that had been predicted to be doomed in the long run. He stated,
“Luna Terra is a ticking time bomb in the crypto world, clearly the most vulnerable project.”
Carter stated that Terra was a financial system that was very sloppy in terms of infrastructure and considered its demise to be predictable long ago for those with a “clear vision.”
He added that the UST algorithm system makes it too complicated for interested investors to understand.
In addition, Carter also added that this mechanism was never corrected because Do Kwon is very aggressive and active on Twitter, making investors irritated when giving criticism.
“Investors cannot criticize UST because Do Kwon is very vocal on Twitter. There are conditions where criticism becomes offensive to the Terra community, so there’s a big incentive not to criticize Terra.” Carter said.
MacPherson, the leading developer of MakerDAO, also agrees with the statement that Terra has been considered by him a sloppy project since its inception. He added that the UST case creates a high need for safeguarding the value of stablecoins based on the value of the original fiat money in the issuer’s reserve fund.
MacPherson also alluded to DAI having reserves 1.64 times the stablecoins it issued, so it is considered a safe stablecoin.
DAI was also mentioned in the conversation because Do Kwon previously said DAI and promised to shut down the project.
It can be seen that DAI is currently alive and UST is dead, which is also one of the hot topics in the crypto world today.
Still the Strongest Crypto Innovation
At the event, a representative from Visa, Catherine Gu, also expressed her opinion regarding the Terra case.
He stated that Visa wanted the unique uses of stablecoins and that Visa’s focus is currently only on fiat-based stablecoins.
Gu stated, “We have to think about establishing crypto projects that exist today because having security standards is important for consumers, retail investors, and institutions. It is important to know the audit process of stablecoins and how they test the stability of the stablecoin.”
In addition, Gu also underlined that many institutions currently trust CBDCs or central bank digital currencies more than stablecoins.
MacPherson of MakerDAO also agrees with the optimistic view of stablecoins by stating that if CBDC goes into an open blockchain, it could become a more secure stablecoin. Reginatto of Circle, a USDC-linked company, had a different response. He stated that the central bank would find it challenging to be given the responsibility of controlling fiat on the blockchain because of its diverse and more complicated system.
He also argues that the system between CBDCs and stablecoins differs because CBDCs are centralized, and stablecoins are not centralized and transparent.
However, criticism regarding CBDC comes from Nic Carter, who states that stablecoins are more consumer-friendly. He stated,
“Stablecoins are the strongest crypto innovation so far; there is no comparison. Stablecoins are responsible for a major transition to transaction autonomy in today’s financial world.”
Carter added that CBDCs could not provide the transparency and anonymity that comes from CBDCs. So he believes that even though there is chaos around stablecoins now, with the proper infrastructure and auditing system in place, stablecoins will remain strong as the main product of the crypto world.
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