Yes and no!
Let start with a bit of background!
Stablecoins are not stable because the value of the stablecoin is linked to the value of the underlying currency. While one US dollar will always equal one dollar, intra-currency moves make it hard to discern which of the “stable-coins” is retaining value – and which are silently bleeding out.
The main reason for stablecoin instability lies on the fiat side and the price movements of the national currency it’s anchored to (like the USD).
Is stablecoins a safe-haven?
The current situation has forced investors to look towards safety as they liquidate risk-on assets and opt-in towards stable assets to weather our the storm.
However, while these assets offer stability in the short term, due to the nature of their pegs (as to USD), they tend to be poor long-term investments as the inflationary nature of fiat currencies devalues the assets over time. And make no mistake with the current rate of printing money, the inflation will come as quantitative easing (QE) takes hold of the markets, and many fiat currencies experience significantly higher inflation rates than usual.
Given the current macroeconomic backdrop and how most central banks and sovereign states are exploring massive stimulus packages, it will be interesting to see how stablecoins perform in the next few months and years.
Will this affect CREATIVES®?
It will NOT affect CREATIVES® since the principle of CREATIVES® is based upon the collection of royalties flowing through the ecosystem from online digital service providers (DSPs). And as such (in our opinion), CREATIVES® is the only real intrinsic currency in existence. DSP will pay for licenses in CREATIVES® and royalties will be paid in CREATIVES®. Inflation of fiat will not affect CREATIVES® as a currency and the value of royalties.
Inflation will only come into play when CREATIVES® is exchanged into fiat.
This means (for example) that by keeping your main portfolio in CREATIVES® and exchange into the fiat currency that at any given time gives you the best exchange rate, you have a long term investment vehicle.
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