[Tutorial]: The History of Stablecoins & CBDCs
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Discover how digital cash on-chain evolved—from early experiments to central-bank pilots
1️⃣ The First Stablecoin Experiments (2014–2017)
- 2014: First waves of “pegged” tokens appear—BitUSD and NuBits aimed to hold USD parity via collateral or algorithms.
- 2015–2016: Projects like Tether (USDT) launch on Bitcoin’s Omni layer, promising 1 USDT = 1 USD reserve.
- Early stablecoins faced transparency issues and occasional de-pegging… lessons learned the hard way!
2️⃣ The Fiat-Collateralized Boom (2018–2020)
- 2018: USDC by Circle & Coinbase debuts with monthly reserve attestations—raising trust levels.
- 2019: PAX, BUSD, GUSD join the ranks—regulated issuers, regular audits.
- 2020: DeFi Summer supercharges demand: stablecoins become the fuel for lending, AMMs and yield farming.
- By year-end, over $20 billion in stablecoins flooded DeFi protocols!
3️⃣ Algorithmic & Crypto-Collateralized Models
- DAI (MakerDAO) launched in 2017 as the flagship crypto-collateralized stablecoin.
- Maintained via over-collateralization and liquidation auctions—truly on-chain trust.
- 2019–2021: Algorithmic experiments (e.g. Basis Cash, Terra Classic pre-collapse) tried supply-expansion models.
- Some succeeded… some spectacularly failed, underscoring the need for robust designs!
4️⃣ The CBDC Era Begins (2020–2023)
- 2020: Bahamas unveils Sand Dollar—the world’s first live retail CBDC.
- China’s Digital Yuan pilots in multiple cities—mobile wallets, e-ID integration, merchant apps.
- EU & US launch research labs and proofs-of-concept for wholesale and retail models.
- CBDCs promise regulated, programmable money… but spark debates on privacy vs control!
5️⃣ Regulation & Integration (2022–2024)
- 2022: FATF issues updated guidelines for stablecoins—addressing travel rule and AML.
- 2023: MiCA in the EU defines token categories and issuer obligations—first comprehensive stablecoin law.
- Major banks and fintechs integrate stablecoins for cross-border rails… hinting at the future of settlements!
6️⃣ Today & Tomorrow (2025 and Beyond)
- Hybrid Models: Central banks exploring token-backed stablecoins alongside CBDCs for private-sector innovation.
- Programmable Features: Time-locked payments, conditional transfers and automated tax withholding.
- Interoperability: Cross-chain stablecoin bridges and multi-CBDC platforms for global liquidity.
- Privacy Enhancements: Research into zero-knowledge proofs for selective transaction confidentiality.
Your Next Steps- Pin this timeline in Stablecoins & CBDCs.
- Follow major stablecoin issuers’ audit reports monthly.
- Explore a retail CBDC pilot (e.g. Digital Yuan app) if available in your region.
- Discuss potential use-cases for programmable stablecoins in our subforum!
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