Jeremy Allaire, co-founder, and CEO of Circle Pay recently took to Twitter to express the potential that Defi space has for Forex. He believes as more countries move towards launching their own stablecoin, DeFi-based instant FX would be a great hit for forex traders. Quite similar to what bitcoin did for institutional players i.e move from gold to bitcoin, defi could pave the way for crypto-based Forex trading in near future.
What happens when legit stablecoins start emerging in different currencies around the world? DeFi-based instant FX. 2021 will be the year that FX starts to move crypto native…SGD/USD on Uniswap now…https://t.co/62g3irsldO
— Jeremy Allaire (@jerallaire) December 7, 2020
A good example for such a future is already on display in the form of the recently launched XSGD, the first Singapore dollar-pegged stablecoin built by Southeast Asian payments provider Xfers with an aim to provide digital asset liquidity. The Singaporean Dollar is paired against USDC on Uniswap with liquidity of over $200,000. The liquidity started to sore towards the last week of November.
Forex – Defi: The Multi billion Dollar Industry in Making
The rising interest of institutional players in the digital currency space has forced many governments around the globe to create a sovereign native stablecoin. Many countries are currently working towards their own digital currency where China has a certain lead as they are already in the pilot phase, while countries such as the US, UK, Germany, Japan, and South Korea are currently studying the possible use cases and impact of such digital currencies.
There is a good chance that within a couple of years sovereign digital currencies would be a reality and using it for the Forex trading using defi would definitely boom. Qiao Wang, a crypto trader and analyst believes defi based Forex could be a booming market in 2021 with over $10 billion in market cap. He said,
FX is going to be the single biggest background in DeFi in the coming years. The winner will be worth at least $10B. Regulations will play a massive role here obviously.
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