CEO of stablecoin startup Reserve, Nevin Freeman, has made a bold prediction that central banks will choose to tokenize their currency in the future. He says that stablecoins will still maintain an advantage with improved privacy.
Freeman’s remarks came at the Consensus 2019 panel, titled “The End of Volatility? Stablecoins on the Rise” which came on May 15, 2019. One of the questions for Freeman came from the moderator, Joel Telpner. He asked why banks wouldn’t tokenize their own national currency. This action would drive stablecoins out of business.
While Freeman admitted that banks will also take this action, he said it won’t have the same level of privacy as stablecoin services. These services allow banks the ability to track transaction history as well as determine who owns the tokenized funds. He believes that businesses and individuals will prefer a service with privacy for transaction.
A correspondent from Cointelegraph asked if stablecoins are anonymous. Freeman replied to the question by saying that users’ identities are checked and verified when they convert fiat to crypto and back again. However, the transactions conducted by tokens are pseudo-anonymous.
Freeman said that the Reserve is trying to make a bitcoin that is stable. Other projects are legitimate, but they are not stable when they are backed by fiat.
The term ‘pseudo-anonymity’ refers to the ability for cryptocurrencies to be public with transactions but to have no public identity. Pieter Wuille is a bitcoin developer who has provided two proposals to provide more privacy for those who use bitcoin by hiding transaction details.