Stablecoins, Bitcoin, and the Future of Payments: Federico Tenga and Luc Froehlich on Innovation & Adoption Challenges

Introduction

• Federico Tenga, core developer at Tether, is currently working on research and development projects
• Currently focused on developing tokenized assets on Bitcoin and Lightning Network

Stablecoin Market and Use Cases

• Three established product-market fits in crypto: Bitcoin (store of value), Stablecoins (fiat payments), and Decentralized gambling
• Stablecoins initially gained popularity for arbitrage between crypto exchanges
• Primary use cases:
  • Trading (current dominant use)
  • Cross-border payments (especially for emerging markets)
  • Savings vehicle (particularly in high-inflation countries)

Stablecoin Models and Innovation

• Distinguishes between true "stablecoins" and investment vehicles branded as stablecoins
• Views investment-focused products as fundamentally different from payment-focused stablecoins

Adoption Challenges

• Two main barriers: motivation and education
• Retail users need education on technology usage
• Institutional players face process and regulatory hurdles

Future Outlook

• Expects some market fragmentation with multiple stablecoins
• Distribution strategies require "boots on the ground" in emerging markets
• Believes high interest rates attracted many players to the market
• Long-term view: stablecoins are preparing the world for eventual Bitcoin adoption