Y Combinator: Stablecoins Possess Unique Advantages and Continue to Be a Blue Ocean
Y Combinator (YC), a well-known startup accelerator in Silicon Valley, has recently outlined its expectations and vision for stablecoin startups in its latest startup request, stating that the market is still full of opportunities and aligns with major trends. YC looks forward to seeing more stablecoin projects emerge and become mainstream.
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What is YC’s startup request?
YC’s interest in stablecoins
Advantages of stablecoins leading to new trends
Limited competition in the stablecoin market
Great opportunities for stablecoin projects
Although Y Combinator does not limit the themes for accelerator applicants, it shares projects and ideas that partners discuss among themselves every year, hoping to see more entrepreneurs moving in those directions.
This year’s proposed themes include space industry, climate technology, open-source products, new types of ERPs, innovative healthcare systems, software integration tools, and cancer-curing technologies, all of which Y Combinator partners believe have potential and demand in the future.
Y Combinator also mentions stablecoins in this list, stating that the stablecoin field is definitely a future trend, and the current competition is still very limited.
YC believes that the advantages of stablecoins lie in their ability to be used at any time during the day, enable transactions between any two wallets, complete transactions within seconds, and incur only a small fraction of the fees compared to traditional finance. Stablecoins can be used for cross-border payments, reduce transaction costs and fraud, and help users protect their deposits from malignant inflation.
Traditional finance will eventually follow stablecoin innovations. For example, PayPal recently issued its own stablecoin, PYUSD, and major banks have started offering custody services and promoting them extensively.
(The catalyst for a bull market? PayPal and Paxos collaborate to launch the first stablecoin: PYUSD)
The development of the stablecoin industry seems somewhat similar to the transformation of digital music from early 2000s online piracy ecosystem to the new industry norm brought about by players like Apple, where everyone can easily purchase and listen to music.
Although stablecoins worth about $136 billion have been issued so far, Y Combinator estimates that there is still a huge market opportunity. Compared to the $17 trillion in customer deposits held by US banks, stablecoins still have significant room for growth. On the other hand, the major stablecoin issuers can be counted on one hand, indicating that the market competition is not yet very intense, making it a blue ocean market.
(Tether CEO: Why can Binance and USDT maintain their leading position in blockchain payments?)
The user base for stablecoins is also relatively small. Currently, only about 7 million people use stablecoins for transactions, while there are still over 500 million people living in countries with inflation rates exceeding 30%.
(Research: Global number of cryptocurrency users reaches 580 million)
Considering the above, Y Combinator believes that stablecoins are a clear future trend, with a huge market opportunity and still being a blue ocean market. YC looks forward to seeing more entrepreneurs invest their efforts in this field. There are opportunities in related tools, B2B payment solutions, stablecoin issuers, and compliance solutions.
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