The UK-based blockchain company Decentralized Capital has announced a demo of its new service, which allows users to transact in various fiat currencies on the Ethereum blockchain, at the International Blockchain Week’s Demo Day held on September 22 in Shanghai.
Through the use of so-called ‘DC Assets’, users will be able to make payments for products and services using digitalized fiat currency. That way, the prominent issue of cryptocurrencies’ strong price volatility will not come into play while transacting on the Ethereum blockchain.
To transact in digital fiat currency on the Ethereum network, users will first need to set up a DC account and an Ethereum address. Then they can either deposit bitcoin at DC via its website or deposit fiat currency directly with DC’s banking partner Crypto Capital.
Once deposits have been received on your DC account they are turned into DC Assets. Subsequently, users will be able to transact in DEUR, DGBP and DUSD and all digital versions of the fiat currencies will be pegged one-to-one to its non-digital counterpart to prevent exposure to cryptocurrency volatility.
The company plans to add more currencies in the near future, but already has a decent coverage across the world’s largest economies, supporting the Chinese Yuan, Hong Kong Dollar, Polish Zloty, Swiss Franc and Japanese Yen.
DC’s banking partner, Crypto Capital, is a Panama-based ‘financial institution for the crypto economy’ that aims to connect the cryptocurrency world with the traditional financial world by creating a fiat banking platform that supports every blockchain. Each deposit of fiat currency is held by Crypto Capital, in addition to taking care of the KYC/AML processes, enabling users unrestricted access to the Ethereum blockchain anywhere they are.
The main selling point of DC’s new service is that it allows fiat currency to fiat currency transactions on the blockchain, which entirely circumvents the exchange rate risk of transacting from fiat currency to cryptocurrency or the other way around. Decentralized Capital CEO, Alex Wearn, believes that people want things denominated in their domestic or local currency and through DC’s new service they will be able to do exactly that; for example, allowing the creation of smart contracts that involve their desired domestic currency.
As DC’s smart contracts follow Ethereum’s token standard that allows for interoperability, future digital assets that follow this standard will easily be recognized by other smart contract services on the Ethereum blockchain. This opens up a wide range of smart contract opportunities involving fiat currency payments.
Allowing smart contract transactions that involve digitalized government-backed currencies will most likely give a boost to the Ethereum network’s adoption rate, which should also boost the value of Ethereum’s official cryptocurrency ‘ether’. As the Ethereum network starts to capture more of the market share of the payments industry, this should, in turn, raise the demand, and therefore the price of ether.
Within a week, the application will be demonstrated live and could be the key application that links the abstract concept of the blockchain to the real world, encouraging greater adoption and interest in this technology and digital assets.