Circle CEO and co-founder Jeremy Allaire shared a prediction today according to which we will see Forex (FX) adopting DeFi stablecoins in 2021. Mentioning the official blockchain-version of the Singapore Dollar, Allaire questions what may happen once more legitimate stablecoins backed by various currencies emerge in the world. Circle’s CEO shared his prediction in a tweet on December 7.
Circle is a peer-to-peer payments technology company based in the U.S. Founded by Jeremy Allaire and Sean Neville in 2013, the company soon became a leading crypto transactions facilitator.
Today, Circle CEO Jeremy Allaire shared his opinion on the state of official stablecoins which represent fiat currencies, and their future position in the FX market in 2021. According to him, it is possible for Forex to adopt DeFi stablecoins next year. Allaire listed XSGD/USD as an example.
Launched in October 2020 by Xfers, a major payment institution regulated by the Singaporean regulatory agency MAS, XSGD represents the first official stablecoin. XSGD is backed by the Singapore Dollar (SGD) on a 1:1 basis, offering a stablecoin that is in compliance with the Travel Rule.
XSGD is a part of StraitsX, an initiative created to feature stablecoins for the entire Southeast Asia region. The ultimate goal of StraitsX is to provide frictionless settlements through fully regulated stablecoins. If successful, the initiative would not only lead to decentralized payments, but to widespread crypto investing and lending adoption as well.
Zilliqa’s smart contracts support StraitsX and its entire infrastructure. As a reminder, Zilliqa is a public blockchain network focused on delivering scalability and security. It is the very first permissionless network to support sharding on its mainnet. By working together with this project, Xfers plan to create an environment in which peer-to-peer payments and cross-border transactions become mainstream.
Will stablecoins truly go mainstream?
Will we see mainstream stablecoin adoption in 2021? It may still be up for debate. The initiatives and projects created by some of the most reputable companies in the blockchain industry remain immensely bullish. However, we still have to see whether retail users plan on utilizing these services.
Furthermore, the integration of stablecoins by Forex is questionable for most. While FX market participants definitely have an interest in such technology, it is up to regulators to decide.
At the time of writing, Singapore represents one of the most crypto-friendly regulatory jurisdictions in the world. Managed by the Monetary Authority of Singapore (MAS), the regulatory agency has implemented several sets of legal frameworks in the past few years. In fact, the SEA economic superpower is far ahead of its global peers in terms of blockchain adoption.
Therefore, we have to see other jurisdictions replicate the progressiveness of the MAS. Before that moment, we will probably not see DeFi stablecoins in FX by the end of 2021. China, Japan, and the EU are the most likely places to support stablecoins or other forms (digital currencies) next year. But for true global adoption, important financial centers like the U.S. will have to approve them as well.