Stablecoins Need More Than Just Size to Succeed – Trust Is the Real Secret

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Concordium’s CEO, Boris Bohrer-Bilowitzki, says we need to stop relying on the dollar for our stablecoins, or else we’ll be in for a big, bumpy ride. He predicts that diversifying stablecoins across multiple currencies will be the key to keeping the system from falling apart like a cheap house of cards.

Stablecoins, Dollar-Centric? That’s a Risky Bet

The stablecoin world has been living in the shadow of the U.S. dollar, with nearly every token pegged to it. Surprise, surprise, right? The dollar is the global financial kingpin. But

Boris Bohrer-Bilowitzki agrees with the Chinese economist (surprising, right?) and warns that keeping all the eggs in the dollar basket is a ticking time bomb. If the U.S. dollar goes through a rough patch, so will the whole stablecoin market. Good luck with that.

“Imagine if 90% of your assets are tied to a single fiat currency that can go haywire at any moment. Doesn’t sound like a solid plan, does it?” said Bohrer-Bilowitzki. Well, tell that to the people who keep printing USD-backed stablecoins like there’s no tomorrow. USDT, USDC, and even BUSD had a stranglehold on the market—until they didn’t. Still, the future? Diversification is the name of the game. EURC, EURS, DCHF, XCHF… Can we please start thinking beyond Uncle Sam’s greenback?

But wait, there’s more! Stablecoins aren’t just about which currency they’re tied to. Oh no, they also have to deal with the lovely risk of “depegging.” You know, like what happened to FUSD? One minute it’s stable, the next it’s all over the place. Talk about trust issues. And trust, as Bohrer-Bilowitzki points out, is the most fragile thing in this whole setup. One wrong move, and the market collapses like a house of cards after a stiff breeze.

“It takes no time at all for the trust in stablecoins to completely evaporate, especially if it’s pushed off-track by someone with a bit of influence, like Justin Sun,” he added, throwing some shade at the famous crypto mogul.

Blockchain Projects Need to Stop Treating Compliance Like a Side Hustle

Stablecoins aren’t just about big numbers and fancy tech. They need trust—trust that’s been built brick by brick. And if you’ve learned anything from the spectacular crash of UST, it’s that size alone doesn’t guarantee stability. Oh no. Size is just an illusion, folks. When the hype dies down, what’s left? Well, stability isn’t built on size; it’s built on transparency, consistency, and good old-fashioned accountability.

“Stability isn’t guaranteed by scale. Transparency, consistency, credibility and accountability are not optional; they’re the foundation of long-term trust.”

And while stablecoins are playing a starring role in payment finance (PayFi) as the next big thing for crypto, they still face a mountain of hurdles. Sure, faster settlements, lower fees, and blockchain programmability sound great. But here’s the catch: Bohrer-Bilowitzki believes these solutions can’t just be thrown together and hope for the best. They need compliance—proper, solid, “we’ve-thought-this-through” compliance. Just asking a third-party to handle it? That’s not going to cut it for real-world adoption. No one’s buying that.

He points out that most blockchain projects treat compliance like an afterthought. Well, that’s not going to scale! But at least Concordium is trying to do it right, designing an identity layer with zero-knowledge proofs. Sounds fancy, doesn’t it? Basically, they allow for verification through trusted providers, without exposing users to the wolves. It’s all about striking the delicate balance between keeping users anonymous while holding them accountable. A tough job, but someone’s gotta do it.

Bohrer-Bilowitzki admits that this compliance thing is trickier than it looks. Integrating a compliance layer across various use cases? Let’s just say it’s not like assembling IKEA furniture. But hey, at least their identity layer is modular and easy to fit into existing financial systems. So, geofencing and age verification might actually be a thing in the future, who knows?

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2025-05-04 07:59