For state-run digital currencies like DCEP, the biggest competitor may not be the digital currency issued by multinational enterprises such as Libra but the digital assets outside the supervision such as stablecoin.
All kinds of altcoins, big or small, have little economic ecology; though “major cryptocurrencies” like Bitcoin and Ethereum have built a unique ecology, the underground asset network on which Bitcoin relies is too non-mainstream to cultivate the habits of the general public.
No matter the crypto market goes bull or bear, investors always have a rigid need for stablecoin – when the market turns from bull to bear, investors will turn their cryptocurrency into stablecoin; when the market turns from bear to bull, investors need to turn fiat money into stablecoin as a springboard to enter the battlefield.
When the market continues plunges into recession and investors are unwilling to sell their token, they will choose DeFi to lease some decentralized stablecoins. Although the scenarios and the demand vary, at least for now, many people have formed a dependence on stablecoin in a specific scenario.
The decision-making, development and application cycle of DCEP will be relatively long. We can see that many details of DCEP are still not finalized after its concept has been put forward for as long as 5 years, and even there may be differences on the major development route.
Compared with the state-run digital currency like DCEP, the development of stablecoin led by small companies is much faster. Taking the stablecoin USDT as an example, it was also proposed in 2014, and now rushes to the fourth place in the market value list of cryptocurrencies, only after BTC, ETH and XRP, but two years ago, it was over 50th in the list.
But stablecoin’s defect is: although the decision-making speed of small companies may be faster, the economic ecology they rely on is highly dependent on cryptocurrency transactions, or even more on altcoin transactions. In view of the existence of bitcoin OTC, it is difficult to judge whether they use USDT to invest in bitcoin or altcoins.
Although the development of state-run digital currencies and stablecoins is not sure. For stable currency, if it does not exist as a decentralized community like bitcoin but operates in the way of enterprise, it will finally be controlled by the government like Libra even if it wins the competition