Last week we saw how Cryptocurrencies are not currently legitimate currency alternatives, due to their low usage rates for payments, wildly fluctuating prices and almost sole use as investment instruments.  However, can tweaks to the traditional Crypto model in the form of Stablecoins solve these issues? What are stablecoins? Will these help Cryptocurrencies become more legitimate currency alternatives? Cryptocurrencies price volatility has long been seen as a negative and barrier to true currency legitimacy, given that it stops them from performing the three key purposes of money in being a unit of account, store of value and means of payment (Mersch, 2018; Carstens, 2018).    One solution to this issue has been the idea and introduction of ‘Stablecoins’ that have been hailed as a way to bring Cryptocurrencies into mainstream use.   In essence they are a digital asset similar to a coin of Cryptocurrency, but are pegged to fiat currencies such as the Dollar or pegged...

Last week we saw how various retailers such as Tesla and Microsoft have begun accepting Cryptocurrency payments for their products. However, is this more marketing ploy on their part, or are the public beginning to view Cryptocurrencies as a legitimate payment alternative to fiat money?     In their current capacity, how are they being used?   In recent years Cryptocurrencies and Bitcoin have been used more as speculative investment instruments, being bet on within financial markets, rather than legitimate payment and currency alternatives. This therefore has less bearing on the general public other than helping shape their price.    As an example, a typical 24 hour period would now see trade volumes of Bitcoin of over 40 billion coins (Yahoo Finance, 2021). This trading volume has increased exponentially over the past decade, as more investors look to capitalise on price fluctuations and increases. Figure 1, Bitcoin Trading Volume in the US from 2013 – 2021. (S...