Given the market share stablecoins have accumulated in the cryptocurrency industry today, it is evident this form of money cannot be overlooked. When it comes to converting these stablecoins to traditional money, there are still plenty of hurdles to overcome. Stellar’s new SEP-6 standard may solve a lot of these problems moving forward, albeit it remains to be seen if this concept can deliver the goods in the long run.
The SEP-6 Standard Explained
As the name somewhat suggests, SEP-6 is a new standard introduced as part of the Stellar ecosystem. Unlike traditional cryptocurrencies, tokens, and assets, Stellar is not following a path similar to Bitcoin or Ethereum. Instead, it targets traditional finance first and foremost, which also requires some slightly innovative ideas and solutions along the way. This new standard will make things a lot more interesting, at least where the stablecoins on the market today are concerned.
To be more specific, any wallet and service provider integrating this new standard will introduce additional off-ramps for their users. By allowing wallets and other clients to interact with a variety of anchors, a more engaging ecosystem and ecosystem is created. This also paves the way for global remittance solutions on the Stellar network by sending anchor stablecoins to others.
Stablecoins to a Bank Account
Most people are familiar with stablecoins today. These tokenized assets represent a specific fiat currency and can be transferred on a global scale at little to no cost. That in itself is always interesting to keep an eye on, although it is still pretty difficult to cash out these tokenized assets in a convenient manner. This is where SEP-6 can make a positive impact as well, as recipients can use the asset offramp and have funds deposited into their bank account accordingly.
As one would come to expect, it is now up to individual stablecoin issuers to integrate this standard and unlock the true potential of their tokenized asset. For the time being, it seems the options are somewhat limited in this regard, but there is a genuine chance things could improve moving forward. It would certainly make these tokenized assets a lot more interesting to people all over the world, instead of only using them to get in and out of cryptocurrencies.
Multiple Off-ramps Exist
Despite the pending integration of SEP-6 into more commonly used stablecoins and tokenized assets, it seems some initial progress has been made already. Three off-ramps are supported at this time, which includes AnchorUSD, Stellarport (for BTC, ETH, and LTC withdrawals) and Tempo (withdrawing euros to any bank account). All of these options are prominent in their own regard, although it remains to be seen how long it will take until other big players take notice of this new option. A USDT-based off-ramp would be rather interesting to see, assuming it is ever created.
Disclaimer: This is not trading or investment advice. The above article is for entertainment and education purposes only. Please do your own research before purchasing or investing into any cryptocurrency or digital currency.
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