Stablecoins, the name given to cryptocurrencies pegged to the price of a stable asset such as the US dollar or gold, have outgrown their label as they become part of the global financial system, said Robert Hackett, head of special projects at a16z crypto.
Hackett said in a report on Friday that the term “stablecoins” was coined in crypto’s early years, when wild volatility defined the space and the tokens were created to maintain stable value and encourage their use for everyday financial activity.
“The name was straightforward, if slightly defensive: not a volatile coin, but a stable one. It described the problem it solved perfectly. But the technology has since outgrown the label,” he said.
“Stability is now table stakes. It’s a prerequisite, and not the point. The question is no longer ‘will it hold its value?’ But ‘what else can we build with it?’” Hackett added.
“That’s why the name stablecoin is outdated now: It still points to the original problem it was designed to solve, not the platform it has become. The term frames the category as a patch rather than a new primitive.”
Stablecoins have emerged as a key use case for crypto. The global market has grown to more than $321 billion, according to DefiLlama. Adoption is also expanding across economies as banks and institutions seek to use the technology for faster payments and other benefits.
John Palmer, a developer and brand adviser, made a similar argument on Thursday and said it “feels like a bug” to call them stablecoins because “stablecoins will probably 10x the impact of crypto thus far and deserve to have a self-defined and non-reactionary name.”
Source: John Palmer
The stablecoin name will likely linger
Hackett said a rebrand to a term that better captures the essence of the technology, such as “digital cash” or “programmable money,” is too clunky to use.
Related: Stablecoins overtake Bitcoin in Latin America crypto purchases — Bitso
At the same time, he argued that the first term that gains traction with a new technology often sticks, such as email, which no longer operates like traditional mail, or horsepower when describing a car’s engine power.
“Stablecoins will probably follow the same quirky etymological path. The skeuomorphic name may linger long after it stops being descriptive. Or it may gradually fade as we simply speak of digital dollars, digital euros and other onchain assets,” Hackett said.
“Most likely though, the technology will disappear into the background entirely and become just how money works, the same way we stopped saying electric lighting once that newfangled gadgetry became the default. Now they’re just lights.”
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