CoinShares: Bitcoin-based stablecoins are coming

Author: Brayden Lindrea, Cointelegraph; Compiler: Songxue, Golden Finance

According to cryptocurrency investment company CoinShares, stablecoins based on Bitcoin may appear in 2024, It can even be “comparable” to the speed and cost of other stablecoins in the industry.

In their latest outlook report released on January 22, analysts at CoinShares explained: “We expect 2024 to be a critical year for Bitcoin in the stablecoin space. ”

“In summary, our prediction is that Bitcoin projects focused on competing in the stablecoin space will be easily adopted by users this year.”

This prediction Christopher Bendiksen, director of Bitcoin research, and analyst Matthew Kimmel from CoinShares.

“We predict that, at least in theory, viable development projects will eventually become accessible tools.”

A successful Bitcoin stablecoin, the team said Coin projects may even be “comparable to alternatives while inheriting the fundamental stability of Bitcoin infrastructure.”

“The Bitcoin blockchain has the longest history, the strongest stability, the least technical debt, and the strongest guarantees,” Bendiksen and Kimmel said in proposing Bitcoin as a stable currency platform’s arguments.

Although Bitcoin-based stablecoins have been created before, Bendiksen and Kimmel predict that this year there will be a Bitcoin-based stablecoin project that becomes easily accessible to users.

“We suspect that businesses and Bitcoin add-ons will gradually integrate stablecoin spending, paving the way for continued usage growth.” They believe this could further strengthen Bitcoin’s monetary attributes and ability to resist censorship.

Technical barriers remain, however, and history shows stablecoin users prefer faster, lower-cost networks, Bendiksen and Kimmel acknowledged.

“Not only does Bitcoin not have the architectural flexibility to natively support external assets like USD-pegged tokens, but history shows that adoption ofstablecoins tends to favor options that offer The platform with the lowest transaction costs and highest speeds.”

According to Trust Machines, several Bitcoin infrastructure companies such as Stacks, RSK and Liquid Network have been created on Bitcoin’s base layer stablecoin.

USDA, Dollar on Chain (DoC), rDAI and Liquid-based Tether (L-USDt) are US dollar-denominated stablecoins launched on the Bitcoin Layer 2 network.

Although these stablecoins exist in Bitcoin Layer 2, Trust Machines said that stablecoins may eventually enter Bitcoin’s base layer, although it is currently “impossible” to do so.

One company that claims to be about to release a stablecoin in the “bitRC20 format” on the Bitcoin blockchain is bitSmiley Labs.

According to its latest "bitUSD" white paper, all bitUSD in circulation will be supported by over-collateralization, and all bitUSD transactions will be publicly visible on the Bitcoin blockchain.

However, the white paper states that bitUSD will only be "soft-anchored" to the US dollar.