The battle of CBDCs and stablecoins: the future of digital money (Part 2)

Stablecoins have grown rapidly as serious competitors to CBDCs, offering a blend of speed, transparency and blockchain integration. Stablecoins backed by fiat such as USDC and Tether peg their value to traditional currencies whilst capitalising on blockchain’s efficiency. This competitive edge has fuelled their rising popularity, with large financial institutions recognising their potential. For instance, JP Morgan, the world’s fifth-largest bank, introduced the JPM Coin for immediate settlements for institutional clients whilst Visa and PayPal have adopted stablecoin transactions, demonstrating growing mainstream acceptance. And the advantages of stablecoins over CBDCs are evident in several key areas. First, stablecoins leverage blockchain networks whereby allowing transactions to be completed in seconds, unlike retail CBDCs which may be slowed down by existing banking systems. Furthermore, stablecoins help drive financial inclusion by providing unbanked populations with access to d…