In 1950, a man forgot his wallet at dinner and asked to be provided with credit. The restaurant granted his request and the Diner’s Club Card was born, the very first payment card issued in the U.S. Yet, it would take more than 20 years for the concept of a credit card to be readily accepted by consumers. Why did it take so long for this new method of payment to be accepted by the general public? For the same reason that stable coins continue to have an up and down relationship with consumers. Our financial culture is accustomed to stability and does not know how to deal with change, especially when it comes to money and volatile currencies. The tendency is to fall back on existing systems that are tried and proven.
Just as people were skeptical of credit cards at their inception, they continue to doubt the validity of stable coins, so they stick with what they know, which are traditional currencies and credit systems. Maybe the consumers’ intuition is correct in this case, as most stablecoins in the market today are not truly stable. They are pegged to traditional standards that continue to bring volatility and inflation, the two largest historical threats to any currency’s stability. We believe that our stablecoin creation platform, Element Zero Network, has found a way to eliminate these threats.
When Dee Hock, the founder of Visa, joined as an advisor to our company, he told me the story of how he created Visa as a decentralized organization in the first place; it belonged to no one. He built it to do good for all, but the banks found a way to beat the decentralized model. He was a genius before his time. Due to this dialog, we designed and implemented Element Zero to be an open source turn-key decentralized platform that belongs to no one. We built it based on his advice and our shared vision in establishing Element Zero and with great potential to fulfill his vision of a truly decentralized payment network. That meeting transformed the way that the Element Zero is structured and we made this stablecoin accessible to everyone.
The strength of Element Zero’s stablecoin solution is that it has removed these two threats to traditional currency stability. Our stablecoin platform is decentralized and is not tied to gold, fiat currencies or other traditional methods of valuation; the dollar started as a promissory note for gold and over time the system changed to enable alternative means of stability. This makes the concept of the Element Zero stablecoins what we consider to be the most loyal system to the concept of money since it is not subject to the fluctuations of various other markets and it is not subject to inflation. It does not employ algorithms to maintain stability as many of the other ‘stable’ coins attempt to do. It is not a complex product that takes hours to understand. Instead, it offers a simple, clear way to provide users with the stability and thus security they need from this new form of payment.
Lastly, by structuring as a not-for-profit, each partner that launches an Element Zero co-branded stablecoin is also an equal participant in the Element Zero Network. By democratizing the stablecoin, ownership is shared amongst the different communities who provide activity on the network.
That’s not to say that a new risk to stability won’t appear, but so far we have seen no challenges to the Element Zero system of stablecoins. And just like credit card adoption, which only achieved mass adoption 20 years after it was born, cryptocurrency and stablecoins will become mainstream when consumers’ trust the system behind the system. In the case of the credit card, it was the introduction of the BankAmerica card and the Visa system. We believe, and so does our advisory team which includes Nobel Prize winners and financial system executives, that Element Zero’s stablecoins will do for crypto what Visa did for credit cards.