Is Stablecoin the Next Big Thing in E-Commerce? - HBR | The MarTech Alert | Scoop.it
A few years ago, if you had heard that the U.S. government might mint its own digital currency, you might have dismissed the idea as starry-eyed futurism — or, less charitably, a joke. Digital currencies, such as Bitcoin, were the purview of speculators and coders, not stodgy central bankers. But this winter, the Federal Reserve announced that it’s investigating the possibility of issuing its own digital coin. Speaking at Stanford, Federal Reserve Governor Lael Brainard noted that the “potential for digitalization to deliver greater value and convenience at lower cost” has piqued the interest of the traditionally risk-averse institution.

Digital payment services — powered by blockchain technology — could be the next great upheaval in global e-commerce growth. For that to come to pass, however, four conditions need to align: appropriate technology, consumer demand, corporate champions, and an amenable regulatory environment.

The question is how. For all the hype around blockchain — the open-source digital ledgers that many have argued will do everything from make cash obsolete to remake the global economy — it can sometimes seem like a solution looking for a problem. While it has found a place in niches such as supply chains and digital IDs, problems like price volatility and the need to comply with the existing regulatory framework have prevented mainstream adoption in currency. But now, one promising category of cryptocurrencies known as “stablecoins” seems poised to succeed where its predecessors failed. Uniquely positioned to act as a medium of exchange in e-commerce, stablecoins enhance both the efficiency and reach of e-commerce.