Y Combinator has uncovered twenty topics in its latest list of startup queries that may indicate future investment trends. Known for supporting early-stage technology startups, the venture capital fund has turned its attention to stablecoin financing as one of its main investment areas.
Stablecoins are a type of cryptocurrency that aims to reduce price volatility. They achieve this by being linked to a stable asset, such as a fiat currency like the US dollar, or a commodity like gold.
“There has been a lot of debate about the usefulness of blockchain technology, but it seems clear that stablecoin coins will play a big part in the future of money,” YC partner Brad Flora wrote in a blog post. He added that YC-backed companies are already using stablecoins for a variety of purposes, including reducing fees and fraud in cross-border payments and protecting users from hyperinflation.
“This tool is so simple that it seems inevitable that traditional finance will follow suit,” he added.
Flora highlighted the actions of key players, such as the introduction of stablecoin by PayPal and the development of custody services by major banks, which indicate the growing acceptance of this type of asset in the financial community. He notes that the adoption of stablecoin is similar to the development of digital music, moving from unregulated initial use to the mainstream.
Despite the fact that stablecoins worth $136 billion have already been issued, the real potential seems much greater. The fund says that more than 500 million people are facing inflation of more than 30%, and only seven million have used stablecoins so far, indicating that their full potential has not been realized.
