Blockchain intelligence firm asserts that stablecoins are not a replacement of the dollar, instead they present a censorship resistance alternative to fiat.
The latest research from Flipside Crypto purports to disprove Tim Draper’s assumption that the advancements in DeFi will displace the U.S. dollar as the world’s reserve currency.
The report starts off by quoting Draper:
“The DeFi world is almost as technologically advanced as the dollar, and when it is, there will be no one who will want to accept politically manipulable currencies like dollars anymore.”
Not fiat replacement
The report focuses on two stablecoins: crypto-backed Dai (DAI) and fiat-backed USDC (USDC). It comes to the conclusion that stablecoin users are not looking to these instruments as replacements for the dollar, but instead prefer them for their resistance to censorship:
“People are not turning to DeFi to replace the dollar. Instead, they are using DeFi to avoid censorship; own their assets; and build financial service without permission.”
The Flow of Dai in the crypto ecosystem. Source: Flipside Crypto.
Comparing the two coins, the report concludes that Dai gets greater utilization in DeFi applications, whereas Coinbase’s USDC enjoys greater traction with centralized exchanges. This is to be expected and is in line with the previous research by TokenAnalyst, which also emphasized that Dai was better integrated into the DeFi ecosystem than USDC or Tether (USDT).
The Flow of USDC in the crypto ecosystem. Source: Flipside Crypto.
Since Coinbase introduced a USDC/DAI trading pair last year, the exchange serves as connector node for the two stablecoins.
Although it is clear that the stablecoins are far removed from replacing the U.S. dollar as the dominant global player, it does not necessarily prove Tim Draper wrong. It may be that the DeFi space is still in its infancy, just making the first painful steps into a new brave world.
Source: , CoinTelegraph
Articles listed with Cash Tech News as the author are either general information, or may have been imported from another website, to bring our readers a rich media experience that encompasses articles that we find interesting, as well as those curated by others.
The views and opinions expressed here are for informational purposes only, and should not be confused with professional financial advice. These opinions are solely those of the author and do not necessarily reflect the views of CashTechNews.com. Every investment and trade involves risk. You should conduct your own research, and contact your professional financial advisor before making any investment.
Corrections, feedback, and ideas should be submitted through the website contact form.