Stablecoins and decentralized finance (DeFi) continue to spur innovation and growth within the blockchain industry.
80% of central banks worldwide are now exploring central bank digital currencies (CBDCs), with the Ukranian government notably engaging Stellar to assist the development of their own CBDC.
Stablecoins now account for over $40 billion in market capitalization, and make up more than half of the daily crypto volume.
The vast benefits stablecoins afford have prompted large brands and enterprises to further explore the technology as well.
In 2019, Facebook made waves with it’s Libra Project (now Diem), demonstrating the power of introducing a digital asset to a hyper connected global ecosystem, and driving awareness for the emerging asset category of branded stablecoins.
DigitalBits, a blockchain protocol hyper focused on the support of consumer digital assets, has led development of branded stablecoins for the past few years, and was recently inducted into the World Stablecoin Association.
With mainnet launch upcoming and the issuance of the first branded stablecoin on-chain, ZUSD, we caught up with DigitalBits lead and XDB Foundation Managing Director, Michael Gord for details.
Blockchain introduces a huge amount of autonomy. Do you think people are ready for this responsibility?
We will see simplified solutions that abstract out the complexities, and the mainstream will likely prefer applications that do this. However, the ethos of blockchain, decentralization, democratic governance, self-custodying, that’s not going anywhere.
It’ll look more like a spectrum, and people will participate in ecosystems and with the protocols and assets that best suit their preferences. The amount of control you have and how much responsibility you take will ultimately be up to you.
I think the genie is out of the bottle. There’s no going back. The technology exists, it’s not being heavily used right now, but we can’t put it back into a box.
Do you believe that the world is ready for digital currencies? Can they really change the world now? What are the best and most recent examples that you can provide?
The world will adopt digital currencies without even knowing it. Some of the examples we’ve seen are institutions with billion plus valuations allocating a percentage of their reserves to Bitcoin.
We’re seeing the likes of Square, JPM Morgan, Facebook, and now PayPal entering the space. Some people are invested into MicroStrategy or are investing in Square, and they get some degree of exposure to digital assets without even knowing it.
It’s the same thing with PayPal introducing digital assets like Bitcoin. A lot of transactions are going to start happening on-chain, and people will be none the wiser.
The adoption of digital currencies will require us to maintain consumer behaviour as much as possible and to integrate blockchain technology into the backend of processes that people do every day.
It is essential that we abstract out the complication. You don’t need to know the inner workings of a cell phone to make a call. Using blockchain will need to become intuitive, and the best way to accomplish this is to have it so that people don’t even know they are using it.
I think one of the first big integrations we’ll see for blockchain is within social networks. They account for massive, interconnected communities with very high engagement levels, which is why there was so much hype behind the Libra Project.
We’ll see rewards for engagement, quantifying what users do on a daily basis.
Soon, much like WeChat, we’ll see more and more in-app transfers, ultimately to the point where people leave their money in the application because it’s so second nature.
DigitalBits recently announced trading for both XDB and ZUSD, as well as support for the first instance of the XDB/ZUSD trading pair. Why is this important?
Any instance in which XDB gains exposure to new users and communities is great, so to have XDB listed alongside the first asset to be issued on DigitalBits, ZUSD, is a huge deal for our ecosystem.
The Asia-Pacific community accounts for about 48% of the global gaming market, which BiKi is perfectly situated to support. Zytara is in the process of rolling out a suite of solutions geared towards Millenials, Gen Z gamers, and esports enthusiasts, so BiKi was a natural fit to launch this initial XDB/ZUSD pairing.
With DigitalBits mainnet going live, users will require XDB to power on-chain operations, with ZUSD providing the stable, borderless digital asset.
Esports and gaming have grown extensively over the years, but the payment rails on which they run just don’t have the ability to keep up. Prize pools are getting increasingly larger, and as the community becomes increasingly global this is becoming a logistical nightmare, with players hailing from every corner of the globe organizers need to consider so many factors including regulations, tax laws, banking, etc.
What is the solution if they don’t use a bank?
Then after all of this confusion is sorted out you’re still forced to use traditional infrastructure that is both costly and slow. ZUSD was a stablecoin built for this use-case and more, and it’s powered by XDB, so it’s great to see BiKi jump on-board to support.
ZUSD is set for an initial launch of Ethereum, followed by deployment on the DigitalBits blockchain later this year. Will users know or be able to choose what blockchain they are running on?
Brands and enterprise will ultimately set the blockchain their applications will default to. Ultimately, I don’t think one blockchain will rule them all and I expect that we’re going to have a number of different chains suited for different functions.
It’s likely we’ll see complex applications that leverage a number of different chains for their different functions. That being said, we are absolutely going to be building functionality so that it is advantageous to use DigitalBits.
It’s good to remember that these are consumer facing applications, so regardless of what protocols brands choose to build on top of, the most successful applications will be those that abstract the complexity from the user experience.
You’ve mentioned going after Stellar ecosystem participants. How do you plan to go about this and why should they choose to build on DigitalBits vs. Stellar?
For the Stellar ecosystem, integrating the DigitalBits blockchain, and by extension all DigitalBits assets, is as simple as the node infrastructure they are used to.
Additionally, we’ll be opening up our global events such as hackathons, startup competitions, and our upcoming Brand Blockchain Summit to the Stellar ecosystem.
Both Stellar and DigitalBits serve different niches, with Stellar focused more on payments and financial services, whereas DigitalBits deals more in consumer digital assets, branded currencies, stablecoins, and so on.
Blockchains are still in a very nuanced state, and I think this may be part of the reason why the debate regarding the most useful chain is still prevalent.
Ultimately, we will have different protocols optimized for different operations, and ideally, applications would leverage several blockchains, using the best one for specific functions.
Then, at some point, I look forward to seeing Stellar-based assets anchored on DigitalBits and vice-versa
With mainnet set to launch this month, what do you expect to see once the DigitalBits blockchain goes live?
It’s very exciting to have mainnet going live this month. This represents a huge milestone for DigitalBits. The last few quarters have been hyper-focused on establishing a solid network of ecosystem partners, and now the core protocol that brings everything together is going to be activated.
Shortly after launch, we have confirmed the issuance of both the Zytara dollar (ZUSD) and Stably’s USDS on the DigitalBits mainnet, and additional institutional on and off ramps for ZUSD.
We are also looking to enhance the liquidity and availability of XDB through more exchange listings, both centralized and decentralized, and introducing three products to go live on-chain that will increase the utility of XD. So definitely stay tuned for that.
The XDB Foundation has talked a lot about branded currencies and branded stablecoins. How does Zytara’s esports focus affect this? Has your strategy changed at all?
Esports, without a doubt, is one of the fastest-growing industries in the world right now. By 2023, it’s estimated that there will be over 3 billion people worldwide playing games.
Alongside this growth we are seeing esports viewership skyrocket, prize pools increase, and sponsorship becoming an increasingly diverse mix of endemic and non-endemic brands, with non-endemic sponsorship increasing 13% YoY.
This is where things really get interesting: the brands getting involved with esports aren’t just selling gaming products. You’ve got Mastercard, Louis Vuitton, and DLK.
This is indicative of the wide appeal of esports, and it’s only going to grow from here.
While being one of the fastest-growing demographics, gamers are also one of the hardest demographics for brands to form a connection with.
Taking these two things into account, I think esports may be the best possible entry point to bringing brands and blockchain together.
What are your plans for the expansion of the XDB Foundation?
We’ve drawn significant inspiration from the likes of the Polkadot and Cardano ecosystems. These organizations have really set the standard for building out communities worldwide.
Crypto is as nuanced as it is global, and as important as it is to have an interconnected global community, it is important for people to connect on a more intimate basis.
We’re currently seeing small communities within DigitalBits pop up in which passionate members are connecting and collaborating.
I’m very excited to see what comes out of this, and we’re looking to support the build-out of these as much as possible through events, hackathons, and the like.
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