Will Businesses Ever Use Stablecoins?

April 2019

Abstract

What are stablecoins and why the current use is limited?

Stability in financial assets isn’t something people usually associate with cryptocurrency, but that may be changing. Stablecoins are blockchain-based payment instruments that aim to achieve the price stability demanded by end users for payments. Stablecoins have solved problems that exist strictly within the cryptocurrency ecosystem, and certain implementations have seen billions of dollars’ worth of daily volume. However, all aresomewhat experimental, with the current range of practical uses limited beyond cryptocurrency exchanges, issuers, and speculators. R3 has conducted an original piece of research diving into stablecoin’s landscape, current limits and how stablecoins can fit into our current payment system with evolving upgrades and iterations.

Research abstract

Stablecoins are blockchain-based payment instruments that aim to eliminate the volatility of cryptocurrencies. So far, stablecoins have seen significant use within the cryptocurrency ecosystem. Yet stablecoins have also been proposed as a payments solution for enterprise blockchain use cases. This paper provides answers for why businesses and financial institutions do not currently use stablecoins, and proposes how these instruments or future iterations may fit into the existing financial system.