Stablecoin vs CBDC: The Everlasting Battle For Adoption

Nagaya Technologies
7 min readMar 30, 2024


The battle between TradFi and DeFI is a battle that has been going on ever since the beginning of its existence with the aim for adoption. The success of Stablecoin during the peak of the DeFI Space was immediately met with the creation of its rival CBDC which is aiming to threaten its lead in facilitating an easier Global Payment Method. So let’s take a look at the journey of the rivalry between Stablecoin vs CBDC and how its outlook might be in the long run.

The Battle for Global Adoption……

The DeFI Space has been quite a journey lately from being scrutinized in 2023 due to the fallout of the previous year to gaining massive admiration in 2024. Most Digital Assets are back where they belong from their peak in 2021 while simultaneously changing a lot of people’s perceptions and proving their doubters wrong once again. The recent Spot ETF approval early in 2024 also marks a significant change in perspective from Institutions and regulators towards the DeFI Space but it was not always the case.

Tracing back to the origin, Bitcoin was designed to be a much more efficient payment method than our current fiat currency. Bitcoin with its limited supply was meant to be the alternative to the excessive printing of our fiat currency which strangely enough was released during the Great Recession in 2008. Of course, nobody knew what Bitcoin was back then in 2008 and because nobody noticed, there was no regulatory framework for the DeFI Space.

Over the years as Bitcoin and the DeFI Space started to expand enormously in the mid-2010s, enormous excitement and attention started to pour into the space despite the uncertainty with the regulatory framework. Bitcoin’s growing prominence as a Digital Asset prompted other innovations to expand the capability of the blockchain technology laid out by Bitcoin and fill in the role of Digital currency aspect within the DeFI Space.

Those innovations are what led to a huge influx of DeFI projects coming shortly after the Bitcoin Boom in 2013 including Ethereum and USD Tether. USD Tether was the project that introduced us to the concept of Tokenization and how it can be applied to our fiat currency to the world’s first Stablecoin in 2015. USD Tether (USDT) is currently available in two different platforms which are Ethereum (ERC20) & Tron (TRC20) Network and essentially derived its value from its 1:1 peg to the US Dollars.


Tether quickly grew in popularity amongst DeFI users as a stable alternative to fiat currency with faster transaction speed and ease of use. Tether’s success not only grew its Market Share within the DeFI Space but also prompted other projects to join such as USDC, GUSD, and DAI to define a new Era of Stablecoin moving forward. These USD Backed Stablecoin would continue to grow as we head to the late 2010s and inspire other forms of Stablecoin such as the Asset Backed Stablecoin and Commodity Backed Stablecoin to adopt the same concept laid out by USDT.

Stablecoins currently serve a key role within the DeFI Space as a stable alternative to the volatile Digital Assets within the market and as an on-ramp option for users to grow adoption. Its impact obviously grew beyond the confines of the DeFI Space as plenty of users from countries with economic uncertainty seek refuge in stablecoin to protect their net worth from the high inflation rate and depreciating value of their fiat currency. Stablecoin also has grown to reach countries where access to financial services is limited to promote greater financial inclusion within the population.

These impacts are a contributing factor to the growing stablecoin space as we head to the 2020s but obviously, its dominance will not go unnoticed. Although Stablecoin ensures a greater circulation of US Dollars within the world, issues of “Dollarization” start to arise as the Stablecoins begin to chip in on the market share of the national fiat currency. This issue would then be the idea behind the creation of its rival Central Bank Digital Currency (CBDC).

Although Stablecoin and CBDC might look alike at first glance as both are Digital Currencies they are different in many ways. While Stablecoins are issued by private entities and supported by fiat currency on its reserve, CBDC is issued by the Central Banks and Governments essentially as an alternative to the physical version of the fiat currency. Just like traditional fiat currencies, CBDCs are directly governed by governmental monetary policies and are subject to the same laws and restrictions.

CBDC were meant to be the Centralized version of Stablecoin and this idea continues to grow during the pandemic era. With the lockdown pushing the economy toward the Digital World, China was the first to enter the CBDC picture with plans for Digital Yuan swiftly after the decision to ban crypto-related activities in 2021 and this triggered other countries to follow. As of July 2022, there were nearly 100 CBDCs in research or development stages and two fully launched: the eNaira in Nigeria, unveiled in October 2021, and the Bahamian sand dollar, which made its debut in October 2020.

The Digital Yuan is also undergoing trials with India and Brazil planning to launch its own CBDC by this year as the hype for the digital world starts to ramp up. The results of the adoption for CBDC are obviously a mixed bag with some totally in love with the idea while others do not feel the difference with the traditional fiat currency. The idea for CBDC is still at an early stage and we should have a much clearer picture when other countries start to join in.

Meanwhile the Stablecoin dominance seems not under threat at the moment as the market is expected to hit $3 trillion by 2028. At the moment this rivalry will go on as we head into the digital world where Centralized vs Decentralized is always discussed even though both aspects share a common goal. The goal is to ensure global adoption and greater financial inclusion for everyone to prosper but can both of them co — exist?

A Completing Factor in the Digital Currency World..

The world is clearly moving to the digital world and blockchain technology will definitely form a vital role in this transition and if that’s the case, then both Stablecoin & CBDC should be able to grow. The Digital World is a big place and there will be a need for Digital Currency to operate within this world, this is why CBDC could be a competing factor for Stablecoin. Both currently have Weaknesses and Strengths that are solved with the other to give people preferences for Digital Currency.


Stablecoin is great because of its ease of use and faster transaction speed while the stability of its peg can be unpredictable at times while CBDC provides the same ease of use with greater stability but its availability remains an issue. Stablecoin can be widely used for the DeFI Space and people with limited access to financial services while CBDC can be used for daily operational activities and for people who are not familiar with the DeFI Space.

If the goal is to ensure greater adoption then we need to also pay close attention to the different demographic of the population. Gen Y & Z might grow up with the DeFI Space and therefore will prefer Stablecoin but that might not be the case for Gen X & Baby Boomers who would prefer CBDC as they are familiar with the traditional banking method. Stablecoin and CBDC would work perfectly in catering to each user’s requirements and empowering financial inclusion for everybody.

Both Stablecoin and CBDC are obviously in the early stage of their long journey to global adoption but while Stablecoin has materialized earlier in 2015, CBDC can be its friendly alternative in the financial sector. After all, the goal behind every technological innovation should be to ease our daily lives and this is why instead of battling with one another, we need to figure out ways to merge the potential of blockchain technology with our real world. Let’s await the exciting development in Stablecoin and CBDC space!

Stablecoin and the concept of tokenization have continued to bring innovation over the years, here in Nagaya we hope that the new generation of tokenization can be adopted seamlessly by everyone. Nagaya in itself is the World’s First Hybrid Digital Asset that has its own gold reserve to maintain its intrinsic value while creating sustainable growth in the long term. We understand the value that real assets like Gold bring and we hope that combining it with the enormous potential of the Blockchain Network should be able to provide value to all of you our holders. If you are interested in knowing more about Nagaya, you can visit our website at

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Nagaya Technologies

NAGAYA (NGY) is a Gold-Backed Cryptocurrency with Subsidiary Projects. We aim to build Trust and Value through LEGALITY and TRANSPARENCY.