FIAT CURRENCY : Fiat money is government-issued currency that is
not backed by a physical commodity, such as gold or silver. The
value of fiat money is derived from the relationship between
supply and demand; and the stability of the issuing government,
rather than the worth of a commodity backing it. Most modern
paper currencies are fiat currencies.
STABLECOINS : Stablecoins, are simply cryptocurrencies with stable
value that is collateralized to the value of an underlying asset such
as USD, GBP or precious metals like Gold, Silver. They share all the
objectives of a cryptocurrency while overcoming its limitations like
volatility, making them much more usable as a store of value,
medium of exchange, and unit of account.
CRYPTOCURRENCY 2.0 : STABLECOINS
9000 BC 1200 BC
118 BC 806 1535 1816 1913 1950 1971 1999 2009
Barter System Metal Coins
Leather Money The Wampum Gold-Backed USD Fiat - USD
Paper Money Gold Credit Cards Mobile Payments
Bitcoin is a first peer-to-peer payment system and digital currency introduced as open source software in 2009 by pseudonymous
developer Satoshi Nakamoto. It is a cryptocurrency, so-called because it uses cryptography to control the creation and transfer of
money. Users send payments by broadcasting digitally signed messages to the network. Participants known as miners verify and
timestamp transactions into a shared public database called the block-chain, for which they are rewarded with transaction fees and
newly mined bitcoins.
CBOE & CME
hits all time high
emerges as a
STAND ON CRYPTOCURRENCY
to launch its SC
INFLUENCER’S VIEWS ON
“Bringing crypto-assets into the regulatory tent could potentially catalyze
innovations to serve the public better.”
(03/02/2018) Mark Carney, Governor, Bank Of England
“We need better cross-border payments ... because it’s good for
development, it’s good for financial inclusion, so Bitcoin can help us”
(26/01/2018) Benoit Coeure, European Central Bank Ex. Board Member
“I regret making comments saying Bitcoin is a fraud, The blockchain is real.
You can have crypto yen and dollars and stuff like that.”
(01/09/2018) Jamie Dimon, CEO, JPMorgan Chase & Co.
“Not so long ago, some experts argued that personal computers would
never be adopted and that tablets would only be used as expensive
coffee trays. So I think it may not be wise to dismiss virtual currencies.”
Countries with “weak institutions and unstable national currencies” may
see growing use.”
(29/09/2017) Christine Lagarde, MD, International Monetary Fund
Disclaimer : Through this material, we do not promote any cryptocurrency. Any information contained herein is not intended to be a source of advice with respect to the material presented. This is just the
personal opinion of the author. Author claims no responsibility to anyone who acts on the basis of information presented in this material. Please do your own research before taking any decision.
Costs & Time
▪ No Banking
access to all
▪ Price Stability
▪ Store of Value
▪ Medium of Exchange
▪ Globally Scalable
▪ Immutable Transactions
▪ Lower Transaction Cost
▪ Lower Transaction Time
▪ Medium of
▪ Highly Volatile
▪ Not a store of
E X I S T I N G P A Y M E N T S Y S T E M
S T A B L E C O I N
C R Y P T O C U R R E N C Y
M E M B E R S O F L I B R A A S S O C I AT I O N
Technological innovations are happening everyday with an aim to bring people closer irrespective of geographical boundaries. There are countless
people who have access to technology but not to a convenient and safe financial infrastructure. Present payment and banking systems need to
evolve with technology to make available faster and secure medium of financial exchange.
Developed Economies like USA, UK, Hong Kong, Japan are
embracing and supporting the change that is happening in
form of Cryptocurrency.
Developing Economies are showing reluctance in adopting
F I AT C U R R E N C Y v / s S TA B L E C O I N
Backed by secure technology and tangible collateral, STABLECOINS extract and combine benefits of both
cryptocurrencies and fiat currencies. It has potential to address many transactional limitations in the present
world. Utilizing Facebook’s global penetration, Libra specially is set to become popular.
CAPTURES DESIRED CHARACTERSTICS OF EXISTING PAYMENT SYSTEM AND CRYPTOCURRENCIES
Launch Year : Sep’18
Market Cap : $ 15 Mn
Day Volume : $ 9 Mn
Launch Year : Sep’18
Market Cap : $ 164 Mn
Day Volume : $ 124 Mn
*NYDFS : New York Department of Financial Services
2017 2018 2019
Bitcoin Ethereum Litecoin Ripple USD(S)
USD(S): USD backed stablecoins includes Tether, Paxos Standard, USD Coin & True USD
Source : www.coinmarketcap.com
POPULARITY OF STABLECOINS
NYDFS* REGULATED STABLECOINS WERE LAUNCHED, NOW ITS TRADING GROWTH IS SURPASSING
OTHER MAJOR CRYPTOCURRENCIES
FACEBOOK JOINS THE CRYPTO CLUB
LIBRA LAUNCH IS THE BIGGEST ANNOUNCEMENT IN THE WORLD OF STABLECOINS WITH NUMEROUS GLOBAL GIANTS
PARTICIPATING, IT WILL BE BACKED BY RESERVE OF GOVERNMENT SECURITIES
Mission: “a simple global currency and
infrastructure that empowers billions of people”
Cryptocurrency Type : Collaterized Stablecoin
Governance: Libra Association of 100 members is a
non-profit based in Switzerland.
Reserves: Reserves backing Libra will consist of
“low-volatility” assets like bank deposits and
government securities in currencies from stable
central banks like USD, GBP, EUR, and JPY
Launch : 2020 Speed : 1000 TPS
Reduced transaction cost and time
Regulated : Facebook has created Calibra FinCEN-
registered subsidiary to ensure “separation
between social and financial data and to build
and operate services on its behalf on top of the
L I B R A C H A R A C T E R I S T I C S
Authors : Pulkit Goel, CFA & CA Aditya Agarwal
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