At the recent Future Innovation Summit event held in Dubai, Cointelegraph hosted a panel titled “Stablecoins, Central Bank Digital Currencies and Cross-Border Payments” to explore whether CBDCs and stablecoins can coexist and how this would be possible.
The panel included Jorge Carrasco, managing director of FTI Consulting; Nikita Sachdev, founder of Luna Media Corp; Jagadeshwaran Kothandapani, head of Middle East and Africa at Citibank; and Eetu Kuneinen, co-founder of gold-backed stablecoin project DGC.
The group explored various topics, questioning whether stablecoins and central bank digital currencies (CBDCs) can coexist. According to Kuneinen, CBDCs would be “centralized in nature” because they would be issued by the government, although they can be built on a blockchain. The executive has argued that government control carries certain dangers. He explained:
“Let’s say they don’t like certain political rivals. They can, with one click, freeze the other party’s assets. So what gives us the guarantee that they won’t use this? Or if it’s a small country, a bigger country is pushing it to do it?
On the other hand, the executive argued that it might be better to create a framework for a stablecoin that is not controlled by a single private company. “We could have a framework where anyone with assets and anyone with access to certain technologies could issue them. So, we could have multiple banks issuing the same stablecoin regulation,” he added.
Sachdev expressed a different opinion on the subject. The executive said that if the government already intended to freeze a person’s digital assets, it already had various means to do so. Furthermore, Sachdev argued that the government’s exploration of the use of blockchain for CBDCs could be a step towards progress that could eventually lead to full decentralization and fully Web3 development.
While the executive appeared to defend CBDCs, she clarified that she is not yet in favor of CBDCs or stablecoins, as recent incidents such as the collapse of TerraUSD (UST) have highlighted how coins stables can also present their own set of risks to the world.
Carrasco added that since the technology is in its infancy, it is inevitable to see problems on the path to progress. “I think it’s absolutely normal to see failures and to see lessons learned as we move forward,” he said. The executive also believes that CBDCs and stablecoins could even become interoperable in the future. He added:
“I think they will coexist. And, probably in a few years, we will see a transnational body that will take care of CBDCs and the interoperability between them and ensure that no government can pull the plug or do anything that affects the interests of the people.
Meanwhile, Kothandapani echoed the sentiments expressed by the other panelists and added that businesses or users will always be the ones to decide which solution is right for them.
According to the executive, they would be the ones to determine what specific “pain points” exist and whether CBDCs or stablecoins would be the answer to that. The executive also believes that the two can coexist as long as stablecoins remain stable and decentralized.