CBDCs Confirmed To Work With Stablecoins: A Big Opportunity For Stellar And USDC
Hong Kong Monetary Authority recently confirmed that Central Bank Digital Currency (CBDC) could work with private stablecoins. This means that crypto projects set for CBDC, such as Stellar Lumens and Circle, will have a significant market opportunity.
According to Hong Kong Monetary Authority, even if the intermediary operators go bust, CBDCs will still work fine with private stablecoins. Furthermore, their study claimed that no CBDC-backed stablecoin had ever been brought to life until now.
But the study further added that “the CBDC-backed stablecoin system is unique and may be helpful for central banks.”
The Market Opportunity For Stellar Lumens And USDC
There is massive hope for CBDC development as 105 countries are exploring the use cases of CBDCs. Amongst these 105 countries includes 19 G20 countries, with 16 already in development, including South Korea, Japan, India, and Russia.
Ten countries have fully launched their CBDC, with Jamaica being the newest country on that list. Nigeria founded its CBDC in October 2021, while China is set to expand its CBDC system next year.
On the one hand, the total supply of USDC is 43,895,982,496, which makes it the fifth-ranked token for market capitalization. On the other hand, Stellar (XLM), whose market capitalization is approximately $2.8 billion, is ranked 25 among other crypto assets. At this time, XLM exchanges hand at $0.11 and has a valuation of over $5.6 billion.
The discovery of CBDC and stablecoin means a more extensive market opportunity for Circle and Stellar. Stellar (XLM) has been the next go-to payment platform for institutional investors. Furthermore, Stellar’s project website reveals that Moneygram and USDC-issuer Circle are among the leading institutional investors using Stellar’s blockchain infrastructure.
About three cross-border retail projects and five cross-border institutional CBDC tests are ongoing. If more countries adopt this digital currency system, Stellar and Circle will benefit immensely from the growth and adoption of CBDCs.
Thus, Stellar and Circle will have more market share soon since stablecoins have worked well with CBDC.
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