Sunday, 3 December 2023

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How CBDCs and stablecoins can coexist: FIS panel discussion

How CBDCs and stablecoins can coexist: FIS panel discussion

At the recent Future Innovation Summit event held in Dubai, Cointelegraph moderated a panel titled “Stablecoins, Central Bank Digital Currencies and Cross-Border Payments” to explore if CBDCs and stablecoins can coexist and how this would be possible. 

The panel included Jorge Carrasco, the managing director of FTI Consulting; Nikita Sachdev, the founder of Luna Media Corp; Jagadeshwaran Kothandapani, the head for Middle East and Africa for Citibank; and Eetu Kuneinen, the co-founder of the gold-backed stablecoin project DGC.

The Future Innovation Summit held in the Jumeirah Beach Hotel in Dubai. Source: Cointelegraph

The group explored various topics, answering whether stablecoins and CBDCs can coexist. According to Kuneinen, CBDCs would be “centralized by nature” as they would be issued by the government, even though they may be built on a blockchain. The executive argued that certain dangers come along with government control. He explained: 

“Let’s say that they don’t like some political rivals. They can, with one click, freeze the other party’s assets. So, what gives us any security that they won’t use this? Or if they are a smaller country, they are pressured by a bigger country to do so?”

On the other hand, the executive argued that creating a framework for a stablecoin that’s not controlled by one private company may be preferable. “We could have a framework where anyone with assets and anyone with access to certain technology could be able to issue it. So, we could we could have multiple banks issuing the same stablecoin regulation,” he added.

Sachdev offered a different opinion on the topic. The executive said that if the government is already intent on freezing a person’s digital assets, they already have various means to do this. Furthermore, Sachdev argued that the government’s exploration of utilizing the blockchain for CBDCs might be a step into progress that may eventually lead to going fully decentralized and fully Web3.

Panelists for the stablecoins and CBDCs panel discussion at the Future Innovation Summit in Dubai. Source: Cointelegraph

While the executive seemed to be defending CBDCs, she clarified that she is not in favor of either CBDCs or stablecoins yet, as recent incidents such as the Terra USD (UST) collapse highlighted how stablecoins may also pose their own set of risks for the world. 

Related: Singapore central bank says three business days is ‘timely transfer’ for stablecoins

Carrasco added that…

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