Stablecoins are the talk of the town and it was no different at the FTT Fintech Festival in November.

We were fortunate to have an expert both on stage and off – Bernhard Schweizer, Head of the Digital Currency Hub at SAP – to explore  how the use cases for stablecoins are evolving.

The Digital Currency Hub is a new solution designed to bridge the gap between core finance/ERP systems  and blockchain-based payments rails, enabling  businesses to make instant, secure, lost-cost payments with stablecoins.

As Bernhard notes, however, if you just are thinking about using stablecoins for payments, you’re are missing the bigger picture and opportunity. Given that under European law stablecoins are non-interest bearing assets, there is a real opportunity cost compared to holding cash. It means that stablecoins would have to be repeatedly off- ramped and on-ramped to avoid idle balances, which isn’t particularly efficient.

Given that real world assets, such as bond and tokenized money markets funds, are getting on chain, it makes sense to use stablecoins to purchase those instruments. That means, as Bernhard illustrates, that stablecoins are a future form of digital cash.

Tune into the full interview below to hear Bernhard’s take on how frameworks such as MiCAR are reshaping issuance and distribution, and to explore his views on both user-level and systemic risks arising from large-scale stablecoin adoption.​

If you are passionate about the future of payments, including stablecoins, then you should be joining us this coming 12 May for FTT Payments. If you can’t wait that long, we will back with FTT Lending on 18 March.