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Leverage Programmable Opportunities Provided by Stable Assets, Rather Than Competing with CBDC

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On April 25th, Cointelgraph reported that in providing stable value, stable currency and Central Bank Digital Currency (CBDC) seem to be two sides of the same coin. However, encryp

Leverage Programmable Opportunities Provided by Stable Assets, Rather Than Competing with CBDC

On April 25th, Cointelgraph reported that in providing stable value, stable currency and Central Bank Digital Currency (CBDC) seem to be two sides of the same coin. However, encrypted stable assets can provide completely different use cases, and CBDC cannot compete with them at all. The key is programmability, as smart contracts can automate and add new features to currencies. Programmability allows for asset support and decentralization, which is not possible in current CBDC design. Developers should leverage the programmable opportunities provided by stable assets, rather than attempting to compete with CBDC.

Viewpoint: Compared to CBDC, the key advantage of stable currency lies in its programmability

Introduction

On April 25th, Cointelgraph reported that stable currency and Central Bank Digital Currency (CBDC) seem to be two sides of the same coin, as they both aim to provide stable value. However, the article argues that encrypted stable assets offer completely different use cases that CBDC cannot compete with. This is because of the key advantage of programmability, which allows smart contracts to automate and add new features to currencies. In this article, we’ll explore the programmable opportunities provided by stable assets and why developers should focus on leveraging them instead of competing with CBDC.

What are Stable Assets?

Stable assets are a type of cryptocurrency that maintain a stable value against another asset or fiat currency. This is achieved through various methods such as pegging to a fiat currency or using a collateralized system. Stable assets provide stability to cryptocurrency users who may be wary of the high volatility associated with traditional cryptocurrencies like Bitcoin.

CBDC and its Limitations

CBDC is a digital form of fiat currency created and issued by the central bank of a country. CBDC aims to provide all the benefits associated with blockchain technology while maintaining the stability of fiat currency. However, CBDC is limited in its capabilities as it is not programmable like stable assets. This means that CBDC cannot be used to build decentralized applications or execute smart contracts.

The Advantages of Programmability in Stable Assets

Stable assets are programmable, enabling developers to automate and add new features to the currency. This opens up a plethora of use cases that CBDC cannot match. One use case is creating decentralized finance (DeFi) applications. DeFi allows users to access financial services like lending, borrowing, and trading without intermediaries. Stable assets enable DeFi developers to create decentralized stablecoin lending platforms.
Programmable stable assets can also be used to create decentralized prediction markets. Prediction markets allow users to bet on the outcome of events and earn rewards for making accurate predictions. With programmable stable assets, these prediction markets can be created without the need for intermediaries, making them more accessible to everyone.

Decentralization and Asset Support

Decentralization is an essential benefit of programmable stable assets. Decentralization refers to a network’s ability to operate without a central authority, which improves security and prevents censorship. Stable assets that are built on decentralized networks are more secure than centralized alternatives like CBDC.
Programmable stable assets also enable asset support. Asset support refers to the ability of a currency to represent other assets. For example, gold-backed stable assets enable users to buy and sell digital gold without having to worry about the storage and security of physical gold.

Conclusion

In conclusion, programmable stable assets offer a range of use cases that CBDC cannot match. Developers should focus on leveraging the programmable opportunities provided by stable assets to build decentralized applications rather than competing with CBDC. Stable assets provide stable value, decentralization, and asset support, making them an attractive alternative to centralized CBDC.

FAQs

1. What is the difference between stable assets and CBDC?
Stable assets are programmable and can be used to build decentralized applications, while CBDC is not programmable and has limitations in its capabilities.
2. What are some examples of decentralized applications that can be built using stable assets?
Decentralized finance platforms and prediction markets are examples of decentralized applications that can be built using programmable stable assets.
3. Are stable assets secure?
Stable assets that are built on decentralized networks are more secure than centralized alternatives like CBDC, as they operate without a central authority. However, it’s important to note that security risks exist in all forms of cryptocurrency.

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