Three roadblocks preventing mass stablecoin adoption: Foresight Ventures
Stablecoins haven’t yet gone mainstream, and at least one roadblock can be solved when regulatory clarity is finalized
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Stablecoins are still a very hot topic right now. Especially for institutions, now that there seems to be a clear pathway for them to gain exposure to the space.
If Empire host Jason Yanowitz is correct, then we could have a decent chance of getting US stablecoin legislation passed in the next month and a half (his predicted range is 30-45 days).
Keep in mind: “The big unlock is the distribution of stablecoin technology,” as Zero Hash CEO Edward Woodford told the crowd at DAS last week.
But Foresight Ventures poses a big question here: How deeply will stablecoins assimilate into the financial system?
Right now, the most popular approach to stablecoins — something we’ve heard from both Robinhood and PayPal, among others — is the “stablecoin sandwich” in which “stablecoins act solely as a bridge between fiat currencies in the middle of a transaction’s lifecycle.”
The potential unlock for stablecoins would be if folks decide to hold their stablecoins instead of swapping back into fiat. This seems like a more likely scenario in Central and South America as well as parts of Asia, but it could still hit some roadblocks in terms of US adoption.
Foresight says there are three concerns (but really just two if we take Yanowitz’s comments into account): regulatory uncertainty, user experience and compliance concerns.
“Mass adoption of stablecoins will not solely come from emerging startups, but from the collaboration of established distribution channels,” Foresight said.
“We’re seeing a trend where Web3 payment startups are taking advantage of mature distribution channels by integrating their technology into existing companies with SDKs, offering users the option to pay with both fiat and crypto in any situation. This approach helps address the cold-start problem and builds trust with enterprises and users from the beginning.”
The door’s starting to open — now we just need to get the crowd inside.
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