“We need more transparency over the reserves of these stablecoins, which I think we’re going to see,” Clara Medalie said.
Blockchain infrastructure provider Paxos has recently published a report, that aims at helping the community look beyond the crypto winter and understand how to respond to the current market conditions.
Inside the 20 pages of the Paxos Crypto Winter Report 2023, the infrastructure provider identified several key opportunities for projects during the crypto winter. This includes seeking solutions and finding potential partnerships for their projects.
Within the report, Clara Medalie, the director of research at the digital asset data provider Kaiko, said that solutions like stablecoins remain one of the crypto use cases that have "consistently proven itself over time.” Medalie said that stablecoins have been very useful for the entire industry.
Despite being one of the use cases that proved itself, stablecoins still have room for improvement. “We need more transparency over the reserves of these stablecoins, which I think we’re going to see,” Medalie added.
Apart from solutions like stablecoins, the report also highlighted that those who view the crypto winter as a "season for bridge-building" will come out ahead of the others. According to the report, it’s important to partner with those who are building businesses that implement technologies that aim to meet the “real-world needs of the financial sector.”
Related: Paxos set to withdraw from Canada amid regulatory uncertainty
Meanwhile, the United States regulating stablecoins may be a necessary step to keep the dollar strong according to Denelle Dixon, the CEO and executive director of the Stellar Development Foundation. Dixon recently said that if they want a strong dollar globally, a USD stablecoin is the "way to see that happen."
On the other hand, the Bank of International Settlements (BIS) recently said in a working paper that stablecoins are a less preferable form of tokenized money. The report likened stablecoins to bearer instruments which were prevalent during the era of "free banking" in the United States.
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