The Benefits of Encrypted Stable Assets Over CBDCs

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

As digital currencies continue to evolve, the discussion of stable value, stable currency, and Central Bank Digital Currency (CBDC) has become increasingly important. However, while CBDCs have been touted as the future of currency, there are some significant drawbacks that cannot be ignored. Encrypted stable assets, on the other hand, have unique use cases that CBDCs cannot compete with. The key factor that sets them apart is programmability. In this article, we will explore the benefits of encrypted stable assets over CBDCs and why developers should take advantage of their programmable opportunities.

What is a CBDC?

According to the Bank for International Settlements, a CBDC is “an electronic form of central bank money that is different from balances in traditional reserve accounts.” This means that it is a digital asset backed by a country’s central bank that is meant to function as standard currency. One of the significant benefits of CBDCs is their stability; they are designed to maintain a stable value linked to the fiat currency of the country they represent.

The Benefits of Encrypted Stable Assets

While CBDCs may provide stability, encrypted stable assets have other unique uses that CBDCs cannot compete with. Encrypted stable assets are digital currencies that are tied to a different asset, such as gold or the USD. These currencies maintain their value even as traditional currencies fluctuate in value. This allows people to retain the same value without the risks associated with traditional cryptocurrencies.

Programmability

One of the most significant benefits of encrypted stable assets is their programmability. Programmability allows for smart contracts to automate and add new features to currencies. This is not possible with CBDCs. CBDCs are currently designed to function like traditional currency, but they lack the programmable functions that make encrypted stable assets so valuable.

Decentralization

Another crucial benefit of encrypted stable assets is decentralization. Encrypted stable assets are not controlled by a central authority, which means that they are less susceptible to government interference and fluctuations in value. This is in contrast to CBDCs, which are controlled by central banks and are subject to government regulations.

Asset Support

Encrypted stable assets also allow for asset support, which means that they can be tied to different assets such as stocks or real estate. This allows purchasers to diversify their investments and hedge against market volatility.

Conclusion

While CBDCs have been touted as the future of currency, they simply cannot compete with encrypted stable assets. The programmable opportunities provided by encrypted stable assets, along with their decentralized nature and asset support, make them a valuable and more versatile option than CBDCs. Developers should leverage the programmable opportunities provided by encrypted stable assets instead of trying to compete with CBDCs.

FAQ

Q1. Are encrypted stable assets legal?

Yes, encrypted stable assets are legal as long as they comply with government regulations.

Q2. Can encrypted stable assets be used like traditional currency?

Yes, encrypted stable assets can be used just like traditional currency, but with added benefits such as programmability and asset support.

Q3. Can CBDCs become programmable in the future?

It is possible that CBDCs could become programmable in the future, but as of right now, they lack the programmable functions that make encrypted stable assets so valuable.