Unleashing the disruptive potential of stablecoins

: an analysis of key success factors and challenges in shaping the future of the financial industry

Abstract

Blockchain-based money has gained significant attention at all levels of the financial sector, including policymakers and the private sector. However, the adoption of stablecoins (blockchain-based money) is still in the early days. Stablecoins are seen as a tool to address challenges in the financial system. To adopt an innovation like stablecoins, harmonization on the different layers is required. This study investigates the factors driving the adoption of stablecoins within the financial industry and what challenges must be overcome. To answer this question, empirical data was collected qualitatively via semi-structured interviews with experts from the financial industry and quantitatively via a public survey. The questions for the empirical research were based on a literature review and two fundamental innovation theories. The triangulated results were analyzed, summarized, and discussed with the existing theory. Our results highlight that stablecoins become a facilitator for transferring value and a means of payment. The stablecoin adoption has three tipping points: regulation, infrastructure, and institutional adoption. Stablecoins should be positioned as a backend settlement tool across various applications in an ongoing transition to digital payment rails. The empirical analysis and literature stressed that the adoption of end-users is connected to the adoption of the existing system: financial institutions, interoperability of systems, and regulators significantly impact the adoption of stablecoins. Therefore, the disruptive potential of stablecoins in the financial industry is tech- and business-case-driven. The study's implications can be used for further research on the adoption of stablecoins and the innovation of payments.

Date of Award	24 Jan 2024
Original language	English
Awarding Institution	Universidade Católica Portuguesa
Supervisor	Peter V. Rajsingh (Supervisor)