Is stablecoin a safe haven for Thailand’s battered crypto investors?
The bloodbath for cryptocurrency investors – who have lost an estimated US$1.7 trillion (62 trillion baht) since October – has seen global interest swing to stablecoin as a potentially safer bet.
Stablecoin is pegged and backed by a real-world asset (usually dollars), for which it can be redeemed.
So could it be the answer for Thailand’s growing crypto market, which has been left battered and bruised by the crash?
Attempting to answer that question is USD Coin issuer Circle, which has partnered with Thai crypto exchange Bitkub to educate locals about its stablecoin.
Jeremy Allaire, founder and CEO of Circle, said the power of digital currency and blockchain will eventually take over financial services such as borrowing, lending and investing. These traditional services will eventually be offered via digital assets and crypto, he added.
"We see a very big opportunity to promote USD Coin in Thailand and Bitkub is the strongest partner to do that for us. But we have other ideas for things that we can do together in future and so this is the start of our partnership," said Allaire.
Speaking at the MOU-signing ceremony in Bangkok yesterday, he said his company would focus first on educating and marketing to promote the use of USDC in trading and decentralised finance (DeFi).
However, Allaire sees a bigger future for USDC in Thailand.
"I think we are optimistic that this can be a long-term partnership that we are just at the start of.”
Circle has chosen Thailand as its launch point for USDC in Southeast Asia.
However, Allaire accepts plenty of education will be needed before people here understand how the stablecoin works, as well as its uses and benefits.
He adds that Thailand’s adoption of crypto is currently in the “speculation phase”.
“Now the next important phase is what I call the utility value phase. It's when the technology becomes useful in everyday life [beyond speculation]."
As its name suggests, USDC is pegged to the US dollar.
According to Circle, the total amount of USDC in circulation as of June 30 was just over 55.5 billion (55,569,519,982). It adds that the coin is backed by reserve assets of $55.7 billion – $13.58 million in cash at US banks and $42.1 billion in US treasury bonds. Circle says this means that its customers could redeem all USDC in one day.
The digital coin is managed by a consortium called Centre, which was founded by Circle and includes members from the cryptocurrency exchange Coinbase and Bitcoin mining company Bitmain.
Circle has also applied to the US Securities and Exchange Commission to be listed as a public company. The commission is currently examining its application.