The whole point of a stablecoin is that its value remains steady, but in a pleasant twist for the cryptocurrency world, the value of stablecoins as an economic resource is taking off. The events of the past few months show the increasing acceptance of stablecoins, and one development in particular may accelerate the process by making it easier to create and manage stablecoins.
- A multinational financial services firm based in France listed its own euro-backed stablecoin: EUR CoinVertible. (source)
- A prominent U.S.-based stablecoin issuer reports 51% of Latin American consumers have made a purchase with digital currency and one-third have used stablecoin for everyday purchases. (source)
- A leading U.S.-based digital payment provider announced the issuance of a USD-backed stablecoin. (source)
- A Nigerian fintech company said it will launch USDC payment settlements with Hedera. (source):
The Stablecoin Studio SDK by Hedera removes barriers involved in creating and managing stablecoin applications. It aims to be an all-encompassing toolkit, integrating cutting-edge features for transparency, compliance and security management.
We’ve seen poorly coded stablecoins lose their peg, resulting in enormous losses for everyone involved. Now, Stablecoin Studio aims to solve many of the problems associated with stablecoin creation and management.
What is Stablecoin Studio?
Stablecoin Studio is an EVM-compatible, open-source software development kit by Hedera. It allows for easy integrations into third-party providers who support stablecoin offerings. Designed for Web3 platforms, institutional issuers and payment providers, Stablecoin Studio’s toolkit makes it simpler to handle cross-border remittance, decentralized finance, inter-bank settlement, wholesale settlement and micropayments. Further, know-your-customer security checks are baked into the token issuance and management process.
Stablecoin pilot project
In July 2023, a South Korean major bank and a Taiwanese financial institution used Stablecoin Studio for a pilot test of international remittances. The proof-of-concept pilot featured real-time foreign exchange rate conversion between the South Korean won, Thai baht and New Taiwan dollar. The financial institutions chose Hedera for its low predictable fees, as bank customers in their region generally pay $20 to $80 in bank fees for cross-border transfers.
Because the pilot was compatible with EVM (Ethereum Virtual Machine), it could be used by a host of other stablecoins as well.
July’s project was the second such pilot for the bank using Hedera’s network. The first involved South Africa’s Standard Bank. Kim Byung Hee, Chief of the Blockchain Division, said of Stablecoin Studio: “We believe it can become a game changer in the Web3 market.”
Hedera reported that the lead time for transactions was 2.5 seconds, compared to 1 to 10 days by traditional methods. The use of Stablecoin Studio enabled remittances that are orders of magnitude more efficient than legacy systems while facilitating real-time FX settlement. Transaction costs dropped from more than $30 to $0.5 cents.
How does it work?
Now, let’s look under the hood to see how it works.
- Typescript SDK: Using an API, smart contracts can communicate with native tokens on the network.
- Web App: The dApp provides a visual way to interact with the creating and managing stablecoins.
- CLI: The Command Line Interface lets developers use simple commands to create and manage coins.
Building success with trust
Shayne Higdon, co-founder and CEO of The HBAR Foundation, talked about Stablecoin Studio at a crypto event. He explained the value of Hedera’s focus on a proof-of-reserve solution for stablecoins and that establishing trust in stablecoins plays a pivotal role in preventing over-issuance. In the past, there have been several events to undermine trust in stablecoins. Hedera’s Stablecoin Studio is building a track record of success to help legacy financial institutions innovate for the future.
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