Stablecoins have indeed become the next phase of blockchain technology, especially in the European Union. New security tokens are very hard to see these days especially after the massive slump that 2018 brought to the market. Most players that simply did not have what it took to survive the lowering Bitcoin hype were removed from the market immediately while those that managed to survive are still clinging on to existence as we speak.
However, one specific type of crypto asset managed to survive all of these market shenanigans, and it is the stablecoins. Why is that? The coin is designed to not change its price no matter what’s happening with the crypto industry. Plus, every time there’s a recession in the market, stablecoins are usually the go-to coins for most traders.
However, they’ve become far more useful than that over the last year.
Why Europe specifically?
By Europe, I mean the European Union. This region is very unique for something as new as cryptocurrencies. Why? Because it’s the combination of almost everything that crypto assets need to thrive.
- A large market
- Sizable investors
- Regulatory clarity
- Freedom of investment
That’s right, the European Union has the unique feature of housing millions of well-off people who are capable of directing funds to the crypto market without worrying too much about the risk. The region is also very friendly in terms of regulation as no matter what the EC (European Commission) decides to implement, it will soon spread to all member states, thus increasing the market for existing companies without too much additional research. This has been the case with KYC service companies in Europe as they’ve tapped into almost every member state.
Already existing crypto hubs
Another major advantage that the EU has is that it’s already the home to a crypto hub. Although the country is not necessarily part of the EU, it still adheres to most of the laws that are relative to the region.
I’m talking about Switzerland, a country that recently got its second city to start accepting Bitcoin as tax payment, and arguably the only country that was supporting Facebook’s Librasupporting Facebook’s Libra.
However, Switzerland has its own problems as well. For one it’s obvious that the country is quite tied to its surrounding neighbours, especially Germany. The country mostly survives off-of its service industry, thus avoiding resources completely. Because of this, should some kind of economic change happen in the EU, the EUR/CHF metric could be completely destroyed thus dragging the whole Swiss economy down with it.
Sure there’s enough gold to support the CHF, but nowadays it’s all about supporting the currency with the country’s economy, and in the 21st century, the economy is the most fragile part of every country.
Universal currency culture
The whole idea of stablecoins is to supply the general population with a cryptocurrency that could be used for daily matters. Cryptocurrencies themselves do not have the ability to do so as they are extremely volatile to the market trends.
Another feature that stablecoins are pursuing is the idea of universal currency where a unit of money can be used by almost everybody all over the world. Naturally, that’s quite far away as of right now, but not so far away in the European Union.
Europeans have already adapted to using the Euro as their go-to currency and it has worked fine for the most part. The idea of using a new universal currency that simply cannot be used as cash should not be too alien for them as well.
This is especially relevant for the Nordic countries where nearly 90% of the population has stopped using cash and a small group of people has started to put chips in their hands for digital payments.
If a crypto adoption were to happen on a massive scale, it’s almost guaranteed to be in the European Union.