Get Ready for Flatcoins: Coinbase CEO Discusses a ‘Better Form of Money
Brian Armstrong thinks flatcoins are the next big thing
- Flatcoins promise price stability without being pegged to fiat currency.
- Brian Armstrong is a cheerleader for the new technology.
- He said Coinbase is “interested in” the concept but not working on its own flatcoin at the moment.
- Meanwhile, existing solutions are exploring different flatcoin models.
Building on the blockchain-based technology of Bitcoin and Ethereum, stablecoins are designed with speed and security in mind, but without the price volatility of their forbearers.
To achieve this, their value is pegged to a fiat currency—most often the US dollar.
Would it be possible to create a non-volatile cryptocurrency for everyday use without pegging it to a single fiat currency? Coinbase CEO Brian Armstrong thinks so-called flatcoins could do just that.
Armstrong Bigs up Flatcoins
The concept of flatcoins is simple. Rather than tying tokens to a single real-world currency, as stablecoins do, the value of flatcoins would track inflation by benchmarking against a cost-of-living index such as the Consumer Price Index (CPI).
Armstrong first highlighted his interest in the idea in a recent YouTube video .
As he explained, the idea of using cryptocurrency to hedge against inflation is well established.
However, people tend to be reluctant to spend deflationary cryptos like Bitcoin, which increasingly functions as a store of value more than a payment currency.
Continuing, Armstrong points out the limits on decentralization imposed by stablecoins. After all, even decentralized stablecoins still track the price of fiat currencies, which are controlled by central banks.
As such, the Coinbase CEO asked: “what would it look like to have a better form of money in the crypto space?”
Answering his own question, he observed that “it would be something that’s decentralized and something that tracks CPI.”
Pointing to services like Ampleforth and Truflation which “offer a way to potentially track inflation on-chain today,” he made the case for a stable payment token that doesn’t require fixing to an intermediary fiat currency.
In an interview on Friday, September 8, Armstrong called flatcoins “the next iteration of stablecoins.” He said Coinbase is “not working on something in that realm just yet, but we’re interested in it.”
Flatcoin Research Advances
At present, there are several flatcoins on the market.
One example is Nuon , which is pegged to the current value of a basket of goods tracked by the Truflation index. Another is Ampleforth’s SPOT , which follows the traditional CPI measure of inflation.
Meanwhile, another approach is to tether the value of flatcoins to real-world assets with stable price histories.
For instance, International Stable Currency (ISC ) is a flatcoin pegged to the price of a basket of real-world assets that does not include the US dollar. Similarly, Collypto tracks a tokenized index of real estate and commodities prices.
Although they diverge in design, what they track, and their reserve and peg mechanisms, the flatcoins listed above are banking on increased demand for a stable, decentralized currency that can be used for everyday transactions.
If Brian Armstrong is right, and flatcoins are the stablecoins of tomorrow, any one of today’s emerging inflation-busting tokens could be the next USDT.
