10-minute explainer on Stablecoins by Dave Birch from the Centre for the Study of Financial Innovation
There are about $117 billion of various sorts of so-called stablecoin out there – and some serious folk worry about the systemic implications. Not (necessarily) Dave Birch, who acknowledges that there are scams, and that there is a need for regulation – but who also believes there is a solid case for digital ‘coins’ that can be used in so-called ‘smart’ contracts.
Dave explains the various types of stablecoin – from algorithmic to CBDC – and suggests that they are in some sense a ‘transitional’ technology not a million miles from the private currencies issued by private banks in the 19th century for small-scale retail purchases. A primer for neophytes.