George Harrap is CEO and co-founder of Hong Kong based Bitspark, a bankless money transfer ecosystem focused on Asia and Africa.
This essay is presented as a part of No Closing Bell, a series leading up to Invest: Asia 2019 focused on how the Asian crypto markets are interacting with and impacting global investors. To keep the conversation going in person, register for Invest: Asia 2019 coming up in Singapore on Sept. 11-12.
Stablecoins are prevalent at all levels of crypto transactions these days, from the largest spot markets on exchanges like Binance to the trading pair of choice by many Hong Kong and mainland China OTC desks. The reason for the demand is simple: stablecoins provide a bridge between the fiat and crypto worlds.
However, not all stablecoins are the same. From currency peg to counterparty risk, there are two competing models duking it out at the moment: trusted and trustless stablecoins, with each referring to different levels of counterparty collateral risk.
We prefer trustless stablecoins as that model eliminates the counterparty risk of needing to trust a company, auditor, bank and humans in general.
The top 5 stablecoins in the market are all pegged to the US dollar and while USD is a reserve currency, that market is quite saturated already. In contrast, the opportunity in the other 180 fiat national currencies used by the majority of the world has barely been realised. That’s where the next frontier for stablecoins is.
In operating Bitspark in many emerging markets we have heard first hand from individuals, NGOs and companies how bank collapses are somewhat common and trust in government and banking is rock bottom.