Much has been written about how delivering fiat currencies digitally can boost financial inclusion and perhaps streamline financial services.
The blockchain has been touted as the solution for any host of information and asset transfer issues — due in part to the fact that data in a blockchain cannot be altered (i.e. is immutable).
One firm, Public Mint, is betting that blockchain, in the service of the traditional monetary system, can help banks build fiat-enabled applications without requiring bank accounts but tokenizing fiat that is held by custodians (such as banks).
The blockchain layer sits on top of a network of 200 banks, the firm said in a release — and the public blockchain is being described as the first one that is “fiat native.”
Those applications could accept credit cards, wire transfers and ACH, according to the company.
“Lack of access to banking is a significant issue for blockchain projects, even today,” Public Mint said. “This has prevented promising projects from being able to accept fiat for their products and services. Credit cards and ACH are dramatically more convenient and necessary for mass adoption. Tokens are used instead for payment, and they introduce huge friction and volatility and eliminate the vast majority of the world as their potential customers.”
Cointelegraph described the initiative as “a stablecoin backed by a network of banks.” Initially, the network will be supporting U.S. dollars, but will eventually support other currencies as well.
Co-Founder Halsey Minor said in his own statement that “the genesis of Public Mint was to allow regulated banks to hold funds which could then be tokenized or ‘minted’, allowing for the creation of applications and business processes around money without actually moving money between banks.”
The firm also said that its wallet source code is available for anyone to download and modify.
We note that no banks are named in the release, but the platform has support from Hyperledger and IBM Digital Asset Labs.
The issue with blockchain, at least in part, is that it exists as a form of digital paper trail — in essence, time stamped within an ecosystem populated by stakeholders who transact without needing to “trust” one another. It’s a system that has been in place for a while, with oversight and regulation (and central banks) in place to keep fiat front and center in traditional banking.
As Karen Webster noted way back in 2018: “Money has been digital and moving around the world that way long before most people started talking bitcoin, crypto and distributed ledger tech.”
Separately, and as noted by Cointelegraph, Public Mint’s Minor co-founded pioneering CNET in 1993. He filed for bankruptcy in 2013 but then founded VideoCoin Network which has in turn partnered with Public Mint.
In only one of the latest examinations of digital currencies, as noted in this space this week, witnesses told a U.S. Senate committee on Tuesday (June 30) that electronic currencies could boost financial inclusion and ultimately help consumers.
Christopher Giancarlo, former chairman of the U.S. Commodity Futures Trading Commission and founder of the Digital Dollar Project, said digitizing the US dollar would “future proof” the greenback. During the same hearing, Charles Cascarilla, CEO and co-founder of stablecoin company Paxos, said stablecoins and digital central-bank currencies are “critical” for financial infrastructure. Senate Banking, Housing and Urban Affairs Committee Chairman Sen. Mike Crapo (R-Idaho) said digital dollar and stablecoins are “inevitable, beneficial, and the U.S. should lead in their development.”