Silicon Valley’s renowned startup accelerator, Y Combinator (YC), has released its expectations and vision for stablecoin startups in its latest call for new companies. YC believes that the market is still full of opportunities and aligns with major trends, and they look forward to seeing more stablecoin projects emerge and become mainstream.
What is YC’s call for new companies?
Stablecoins receive attention from YC
Advantages of stablecoins bring new trends
Limited competition in the stablecoin market
Opportunities in stablecoin projects
Although Y Combinator does not restrict the themes of startups applying for accelerator guidance, they annually share projects and ideas discussed among partners in the hope of seeing more entrepreneurs venture in these directions.
This year’s proposed themes include the space industry, climate technology, open-source products, new types of ERP, innovation in healthcare systems, software integration tools, and cancer-ending technology, all of which Y Combinator partners consider to have potential and demand in the future.
Y Combinator also mentions stablecoins in this list, stating that the stablecoin field is definitely a future trend, and current competitors are still very few.
YC believes that the advantages of stablecoins lie in their ability to be used at any time during the day, for transactions between any two wallets, completed within seconds, and with costs being only a fraction of traditional finance. Stablecoins can be used for cross-border payments, reducing transaction costs and fraud, and helping users protect their deposits from the impact of malignant inflation.
Traditional finance will eventually follow stablecoin innovation. For example, PayPal recently issued its own stablecoin PYUSD, and major banks have begun offering custody services and promoting them extensively.
(The catalyst for a bull market? PayPal and Paxos collaborate to launch the first stablecoin: PYUSD)
The development of the stablecoin industry appears to resemble the transition of digital music from the early 2000s’ online piracy ecosystem to the new industry norm brought about by players like Apple, where everyone can easily purchase music for listening.
Despite stablecoins worth approximately $136 billion already being issued, Y Combinator assesses that the market opportunity is still enormous. Considering that US banks hold $17 trillion in customer deposits, stablecoins still have significant room for growth. Moreover, major stablecoin issuers can be counted on one hand, indicating that market competition is not yet very fierce, making it a blue ocean market.
(Tether CEO: Why can TRON and USDT maintain their leading position in blockchain payments?)
The user base for stablecoin usage is still relatively small. Currently, only about 7 million people use stablecoins for transactions, while there are over 500 million people living in countries with an inflation rate exceeding 30%.
(Research: Global cryptocurrency user base reaches 580 million)
Given the above, Y Combinator believes that stablecoins are a clear future trend, with enormous market opportunities and still being a blue ocean market. They look forward to seeing more entrepreneurs invest their efforts in this field. Opportunities can be explored in related tools, B2B payment solutions, stablecoin issuers, and compliance-related problem-solving solutions.
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Further reading
Is Stablecoin a good business? Why did Circle lose almost one billion in 2022?
Biden is rumored to release administrative orders related to cryptocurrency next week.