HyFi Stablecoins

Stablecoins combine the benefits of a blockchain (e.g. transparency and speed), without the inherent volatility risk of crypto-currencies.

Fiat-backed stablecoins enable fast financial processes and have low to zero processing fees. They are transparent, borderless, and programmable. Stablecoins can reduce counterparty and settlement risk, decrease capital requirements and enable instant value transfer.

Conventional payment systems involve the movement of E-money across multiple private databases (of banks, money transfer organizations etc.). This is why typical cross-border payments involve high cost and time.

Blockchain technology removes the characteristic of infinite reproducibility from a digital asset. It confirms that each unit of value was transferred only once, solving the long-standing problem of double spending.

A stablecoin runs on a blockchain, and not in private databases, and that is why movement of stablecoins can happen in real-time at near zero cost.

The United Nations recognizes 180 currencies across the world – Indian Rupee, US dollar, Euro, Japanese Yen, etc. E-money is a digital representation of fiat currency used to electronically transfer value denominated in fiat currency. E-money is a digital transfer mechanism for fiat currency – i.e. it electronically transfers value that has legal tender status.

Stablecoins are E-money and not virtual or crypto currencies. This makes stablecoins legal in most countries.

On 4th January 2021, the United States Comptroller of the Currency clarified national banks’ and federal savings associations’ authority to participate in independent node verification networks and use stablecoins to conduct payment activities and other bank-permissible functions.

US national banks and federal savings associations can participate in independent node verification networks and use stablecoins to conduct payment activities and other bank-permissible functions.

United States Comptroller of the Currency

Conventional stablecoins are not stable!

Conventional stablecoins are not stable! Consider a USD pegged stablecoin like Tether (USDT), USD Coin (USDC), or Binance USD (BUSD). Their values are not $1 most of the time. Their all-time highs and lows are:
USDT: $1.21 and $0.8995
USDC: $1.11 and $0.9292
BUSD: $1.11 and $0.8861

In case you are wondering, this does NOT include exchange fees or withdrawal fees. That's extra!