It is a question on most people's minds. How does it make sense that potentially hundreds or even thousands of businesses will launch their unique stablecoins?
This question generally leans on how users, customers or consumers will feel about this development.
One conclusion that stands out, which I want to counter, is that: business will force consumers to use their stablecoins.
That is never going to happen. If any business is foolish enough to do that, they'd just lose their customers to competitors.
So what would really happen when multiple businesses launch a stablecoin?
One thing people need to understand is that the realities of money are changing. It's no longer just a currency in a bank account, it's now a product, so when we say that many businesses will be launching a stablecoin, we are essentially saying that they'd all be launching this unique product.
That said, given that Tesla and McDonalds are two completely different businesses, if they both were to launch this unique product, it would have to serve their target market really well!
It is easier to understand what is happening when the focus is on what is being offered and not the means.
The means is the USD, wrapped up in a token on a blockchain, whose value is pegged to it.
What is being offered, however, will vary by business or company.
Stablecoins as products; the game of incentives
When you're shopping at Walmart, what have you always wished they offered?
What about when buying a Tesla or whatever car brand you love?
When a business launches a stablecoin, the onboarding phase will require incentives.
This process turns what should be just a currency, into a product because it essentially becomes tied to benefits that serves a want or need of customers.
You wished that Tesla would be cheaper?
Well then, pay with TesUSD.
Need cheaper rates for purchases at Walmart?
Well then, pay with WalUSD.
At the end of the day, you'll be given the option to access certain perks by using the company's native stablecoin.
It will be up to you to decide if the incentives are appealing enough to use these stablecoins.
Now I know that one could still wonder: wouldn't there just be too many stablecoins that a lot of friction is created in the process?
This is something, I imagine will be an easy fix, especially since we are dealing with centralized stablecoins, the heavy lifting will be done by the underlying infrastructure and most processes will be limited to a single or 3 clicks.
Let's say I hold TesUSD (Tesla USD) and I need to swap to WalUSD (Walmart USD) to get whatever benefits Walmart has to offer.
Walmart’s underlying stablecoin tech will handle the conversion of my TesUSD into WalUSD. Meaning I'll most likely be able to deposit what I have at any given point, for what the platform I am interacting with requires to grant me special benefits, while still being able to freely pay in any currency.
This is something that will be pretty easy to execute especially if most businesses opt to use stablecoins infrastructure like Bridge, by Stripe.
Think about it. If the underlying stablecoin tech is Bridge for all 10 businesses I am interacting with, swapping across these currencies will be a bliss as Bridge would handle all of that in the backend.
Businesses are not going to have a hard time managing flows like this because most will use readily available infrastructures like Bridge.
They will also not force adoption, but incentivize it.
It could be through discounts on payments, yield on purchase values, cashbacks or anything else imaginable.
Most people think of fragmentation when they hear about numerous businesses launching a stablecoin, but this is not the case, especially since we're dealing with centralized businesses.
The system doesn't need to run on one centralized stablecoin, it just needs centralized infrastructures that are interoperable and millions of stablecoins can move freely across platforms and it'd all feel very normal and straightforward for consumers.
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