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The Evolution of Stable Currency in Blockchain: From IOUs to Assets

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The Evolution of Stable Currency in Blockchain: From IOUs to Assets

It is reported that in response to the recent problem of the stable currency market, Matt Hamilton, former developer relations director of Ripple and now chief developer of Protocol Labs, said on social media that XRP Ledger is the first blockchain to support the so-called stable currency. On XRPL, this type of asset is named and called IOU (I own you) tool, that is, debt obligation. Users lend 1000 dollars in exchange for 1000 USDC, and Circle will return it as needed, Such a system requires users to clearly determine their level of trust in counterparties. Matt Hamilton said that the concept of stable currency changed because of the arrival of Ethereum, because people began to regard the stable currency such as USDT or USDC itself as an asset rather than the debt of other assets.

Former developer relations director of Ripple: Ethereum has changed the concept of stable currency from debt to asset

Analysis based on this information:


The stable currency market has been facing turbulence lately, and Matt Hamilton, chief developer of Protocol Labs and former developer relations director of Ripple, has reported a groundbreaking revelation on social media. According to Hamilton, XRP Ledger was the first blockchain ever to feature a type of asset that can be regarded as a stable currency. This asset is identified as an “I Own You” (IOU) tool, also known as a debt obligation.

The operation of this system is simple. Users lend 1000 dollars in exchange for 1000 USDC from Circle, the crypto financial services provider. Circle returns the amount as needed, and the entire process requires both the lender and the borrower to establish a high level of trust with each other. Users must ensure the reliability of their counterparties to avoid being defrauded.

Hamilton also added that Ethereum introduced a new perspective to the concept of stable currency. Ethereum allowed stable currencies such as USDT or USDC to be regarded as assets instead of debt obligations representing other assets.

It should be emphasized that XRP’s IOU tool worked primarily as a temporary solution to the stable currency problem in the absence of alternatives available at the time. Later, options such as USDT and USDC became more popular, and now we have numerous stable tokens in circulation in multiple blockchains.

However, the notion that a stable currency needs to rely on trust between participants remains crucial in current systems. Moreover, the concept of a stable currency as an asset creates a new dimension to this market, generating opportunities for investors to trade or invest in them.

In summary, Hamilton’s statement offers a historical insight into the evolution of stable currencies in blockchain, from their emergence as debt obligations on the XRP Ledger to the current situation where they are viewed as an asset that can be traded. Keywords such as XRP, stable currency, IOU, asset, and debt obligation drive and denote the evolution of the concept and shed light on the current market situation.

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