The cryptocurrency ecosystem is something that has been evolving at a rapid speed in the past few years. Since Bitcoin came around and ushered in what can be seen as generation one blockchain and application, there has been some upgrading and pivoting.
Bitcoin, still as relevant as ever — if not the most applicable and relevant in the space — has also seen the era of programmable blockchains emerge through Ethereum and others. But, there are more changes in the ecosystem that could be considered the next generations or iterations of the space that continues to seek its real killer application.
The recent advancements in the possibilities of blockchains have seen stablecoins emerge — and they have found interest from as high up as central banks, and then there’s the ever exciting DeFi arena that is also looking to disrupt the space.
However, for one crypto enthusiast, investor, early crypto adopter, and CEO of Gemini exchange, Tyler Winklevoss, the newest need for an adoption drive is for the appreciation of DeFi at a Wall Street level which will lead to a stablecoin arms race.
During a recent interview with The Defiant’s Camila Russo, Winklevoss predicted that the real race between stablecoins will not take form until Wall Street takes an interest in DeFi:
“When Wall Street wants to start investing in decentralized finance, they’ll need a currency. When a decentralized [Real Estate Investment Trust] pays off a dividend or a stock, is it going to pay it to investors in Ether? Probably not because of the volatility, but in a stablecoin.”
However, Tyler offered a damning appraisal of many existing stablecoin projects, stating:
“A lot of these stablecoins, they just put their own cash deposits to goose up the assets under management to give this perception that it’s bigger than it is. I think it’s kind of bullshit. People see through it.”
Fighting against negative interest rates
Another reason that Wall Street may start to be drawn to DeFi is the current climate which is slashing interest rates.
Winklevoss also emphasized the value proposition crypto assets offer through offering interest yields from staking or DeFi protocols amid the deteriorating global economy, stating:
“Super important in this environment with zero interest rates, maybe negative interest rates, potentially hyperinflation, [is] the ability to earn yield anywhere like 5%, 6%, whether it’s staking or you know, a DeFi money market,” he stated.