Coinbase wants to build inflation-linked stablecoin

Coinbase plans to build an inflation-linked stablecoin. That is something that according to the exchange platform is “more important than ever” as inflation hits around the world. The currency should not be affected by the “bad policies” of central banks. It almost sounds like they are talking about Bitcoin.

Flatcoins

The American trading house calls the idea “flatcoins” and sees this form of stablecoins as one of four “critical” innovations to be built on Coinbase’s layer-2 network Base. The other three innovations are an on-chain reputation system, an on-chain limit order book, and tools that make the DeFi world a safer place.

The trading platform explained these four ideas in a March 24 blog post, about a month after Coinbase launched their Base. Base is a network secured by Ethereum and powered by layer-2 network Optimism.

In light of the current banking crisis, it is very important that “flatcoins” are introduced, according to Coinbase. Currencies that don’t care about inflation and central bank policies.

While most stablecoins are pegged to the US dollar, flatcoins must be pegged to a certain standard of living. The only question is how they will manage that at Coinbase. After all, that value has to come from somewhere.

No clear answer

If you want your capital to grow in line with inflation, you have to take real risk and invest. Especially in a world where the money supply grows faster than production. After all, prices, measured in government money, always rise.

Read Also:  Automating Reporting And Analytics Processes

The only way to protect yourself against this is by investing in, for example, companies, index funds, bonds, gold or Bitcoin and other cryptocurrencies.

A flatcoin is a cute idea in itself, but it already sounds dangerous. After all, you can never guarantee that the value of an investment will increase in line with inflation. If that had been the case, then central banks would have succeeded in keeping inflation at 2.0 percent at all times.

Recent Articles

Related News

Leave A Reply

Please enter your comment!
Please enter your name here