Stablecoins like Tether (USDT) and Circle USD (USDC) could become a significant decider in future contentious hard forks, says Ethereum co-founder Vitalik Buterin. He argued that centralized stablecoins could be a significant decider of which blockchain protocol the industry would respect in hard forks.
Speaking at the BUIDL Asia conference in Seoul, South Korea on August 3, Buterin said the merge will have two separate networks. There are exchanges, Oracle providers, and stablecoin providers that are kind of deciding in a way – which one they respect. He said that at that point, the user will have 100 billion USDT on one chain and 100 billion USDT on the other chain. Tether needs to stop respecting one of them.
However, Buterin has not seen any indication that such a contention would be a problem in Ethereum’s upcoming Merge. He noted that the centralized stablecoin issue is more of a concern for future hard forks. The Ethereum co-founder believes that in the future this will definitely be of concern. He pointed out that USDC’s decision of which chain to consider as Ethereum could become a significant decider in future contentious hard forks. Ethereum could see more contentious hard forks, in the next five to 10 years, where centralized stablecoin providers could carry more weight. Buterin says that the Ethereum foundation may be weaker at that point, or maybe the ETH 2 client teams will have more power. Or maybe Coinbase would run both a stablecoin and would have brought up one of the client teams. He sees lots of these kinds of things happening.
Buterin proposed different kinds of stablecoins. He wants to encourage the adoption of more kinds of stablecoins – a wrapper for a whole bunch of real-world assets.