Despite their concern, digital currencies and central bank deposits quickly turned into a serious alternative to typical bank accounts. CBDC is electronic money issued by the central bank for use by consumers and companies in place of traditional funds. This concept was popularized in a particularly interesting article published in 2016 by Warren Weber, a research consultant for the Bank of Canada, who examined in detail the currency issued by the central bank and with the support of Bitcoin (BTC). Since then, central banks around the world have begun to explore this concept by creating research groups and working groups, as well as international organizations such as the International Monetary Fund, the Bank for International Settlements and the analytical center of the CBDC group.
In recent years, CBDC investors have gained momentum thanks to the gradual approach of central banks interested in the possibility of launching CBDC. These deposits include artificial CBDCs and stable currencies, which are symbols in national currencies, but are issued by a private sector company in cooperation with a central bank or a regulated financial institution. While artificial CBDC implementation proposals are currently evaluated by central banks around the world, stable currencies are the only form of the three forms of central bank digital money that are currently operating and in the market. Stable currencies are stored and sent using digital wallet applications. The issuers themselves are either regulated banking institutions or supported by regulated banking institutions. Our study indicates that the total addressable market for CBDC and its expenditures exceed $ 18 trillion, which is the total value of money currently in bank accounts around the world that can be instantly recovered, according to Trading Economics.
The stark contrasts between traditional bank accounts and stable currencies are the improved speed, cost, and availability that coins provide compared to traditional bank accounts. In traditional circumstances, even the simplest banking functions of storing, sending and receiving money are only available to bank customers and are usually associated with old processing times and commissions. Stablecoin solves these problems thanks to its open design, allowing consumers around the world to store, send and receive the selected currency for free using a smartphone and an internet connection only.
In recent years, many new exporters have entered the stable currency market, and the total value of stable currencies issued in US dollars at the beginning of 2019 was about $ 2.7 billion. Although the first major source of stable currencies, Tether (USDT), has maintained its market lead thanks to the petition. Over the years, these new exporters brought in additional capital inflows of $ 700 million to Stabecoin in 2018, worth $ 11.5 billion of this year's annual $ 1.1 trillion volume of Stabecoin.
While the volume of trade in glassware has increased significantly over the past years, the volume of payments has increased significantly. According to Coin Metrics, in 2018, more than $ 109 billion was sent over Tether. Although these numbers are weak compared to the many trillions of US dollars sent through bank transfers, they indicate a huge demand for such a solution and successfully compete with alternative money transfer alternatives such as Western Union, which saves about $ 200 billion annually.
A particularly noteworthy feature of the stable currency market is its effectiveness compared to traditional developing countries that operate in parallel currency markets. In particular, the difference between exchange rates and official exchange rates was two percentage points from two figures in traditional emerging economies, but it is still largely under control throughout the stable currency market. In fact, this has created some of the most efficient parallel currency markets in history, mainly due to their digital nature. For those in the ineffective parallel currency markets today – for example, in Venezuela – stable currencies offer a viable alternative to domestic payment and money systems that particularly resist political and currency accidents. Given the possibility of a complete closure of the banking system, as it was in Cyprus in 2013, Stabecoins and Bitcoin offer the only viable, efficient and basic alternative to conventional bank accounts.