The one stablecoin to rule them all?

How many stablecoins do we need?
I may need to create a spreadsheet just to keep track of stablecoin projects. Every day seems to bring a new one. I am not exaggerating when I say there are more stablecoins than currencies in the world. There are roughly 180 circulating currencies in the world. There are more than 300 stablecoins, according to CoinMarketCap.

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The latest effort to cross our transom is called Open Standard, and our Joey Pizzolato wrote about it on Tuesday. A consortium of 140 members have signed on to launch and use a stablecoin called Open USD. The group includes some very big banks, payment companies and crypto firms. And what’s different about this effort is only the consortium and the names attached, because the reality is that every stablecoin is virtually identical to every other stablecoin. (Incidentally, 140 may sound like a big number, but it is not. It’s just a start, a tiny sliver of U.S. banks and financial services firms. There are about 4,500 banks, plus another about 4,000 credit unions.)

The bitcoin protocol is really quite ingenious, even elegant. The specific features that went into the bitcoin protocol combine in such a way to produce a network that can operate without central control. But ultimately, bitcoin is essentially just an elaborate open ledger dedicated to recording transactions. If you ask me, the most interesting aspect of the entire cryptocurrency phenomenon is the degree to which it has shown that what we think of as “money” is nothing more than a complicated accounting system.

Really, anybody can create that. The features aren’t all that important. What is important is who’s backing them and who’s using them. What matters isn’t the token itself, what matters is who accepts it, and how many accept it. What matters is ubiquity. For national currencies, this is not an issue. Governments back them and decree their citizens use them. For stablecoins and cryptocurrencies, anybody can use them or not, so there is a scramble to get on board with whichever one or several will emerge dominant. They’re all exactly the same, which is why you see so many of the same names on all these announcements. 

So, how many stablecoins do we need? One, assuming you can get everybody to agree on which one.

The X factor
Speaking of the importance of ubiquity, Elon Musk  has finally “launched”  the bank-like app for Twitter – I’m sorry, for X – that he’s been planning for years, as our John Adams reported on Monday. It’s part of his attempt to turn Twitter – I’m sorry, X – into a proverbial “everything app.”

It’s not a bad idea, but it was a much better idea when Tencent had it 15 years ago for WeChat, which in China is in fact an “everything” app, combining social messaging, video, games, payments, and a bunch of other features and has more than a billion users. WeChat has become almost indispensable in China, and you can imagine that’s what Musk has in mind for Twit…well, for his social-media efforts. But he faces some big obstacles.

Twitter was never the biggest social-media platform. What made it important was the social cache it had. It is a different platform today, a very different platform today.

Statista has a good chart, the most popular social networks by the number of users. First is Facebook, with 3 billion. WhatsApp is second, also with 3 billion. Instagram, YouTube, TikTok, WeChat, Telegram, Messenger (yes, that’s four that are owned by Meta). Nope, X has not shown up yet. In fact, you have to click on a button that says “expand statistic” to find X and its 557 million users, which come after Snapchat, Reddit, Douyin, Kuaishou, Weibo, and Pinterest. Have you even heard of all of them? I hadn’t. 

X has users, yes, but it is not nearly as ubiquitous as it was when it was Twitter. And it’s not even clear how many of those users on X are human anymore. Like it or not, Facebook has far more ubiquity than X, and Facebook has struggled to build payments and money features into its service. Musk is trying to implement a plan that was ingenious a decade and a half ago with a platform that matters less than it ever has. 

He should probably just join Open Standard and call it a day.