Coinbase is exploring the development of “flatcoins” on its Base network. Flatcoins, according to Coinbase, are inflation-pegged stablecoins. They are allegedly going to be backed by the “price of living.” Unlike normal stablecoins that are pegged to the U.S. dollar or other currencies, flatcoins would be pegged to inflation rates. Because of this, they should retain their value over time.
JUST IN: Coinbase explores creating an inflation-pegged stablecoin by tracking inflation data.
— Watcher.Guru (@WatcherGuru) March 27, 2023
The launch of the Base network has generated interest in Coinbase. Now, the leading exchange is working towards improving its ecosystem. Their latest interest in developing flatcoins is quite a bizarre take; at least that’s what experts think. However, the exchange believes that now it is “more important than ever” to create an inflation-tracking stablecoin. This is because Coinbase believes that only flatcoins can provide stability in value during economic uncertainty. Resiliency is the main element of a flatcoin, Coinbase developers say. They believe that the crypto industry will improve through the utility of such coins.
Moreover, Coinbase developers are working on an on-chain reputation system and order book. The exchange is also exploring tools to make its DeFi ecosystem safer. The vision for Coinbase’s blockchain is to bring the next billion users on-chain. Coinbase believes that developers around the world will make Base their home, considering how user-friendly it is.
Flatcoins are particularly beneficial to countries or regions with high inflation rates. In such countries, consumers are the ones who suffer the most. Because consumers may be hesitant to keep their money in the local currency, Coinbase believes they can use flatcoins. By tracking the consumer price index and inflation data, flatcoins can offer stability in value. This will overcome the issue of volatility and high inflation rates.
Flatcoins Might Not Be Successful
While the concept is tempting, flatcoins might fail. There have been several tries to create a successful flatcoin until today. Some flatcoins that will launch some days from now, nuon.fi, meter.io, and tips.io are getting a lot of attention. Nevertheless, experts are skeptical about its future. Some are even arguing that a flatcoin is likely to classify as an unregistered security or an index, both of which are not allowed by the US Securities and Exchange Commission.
While Coinbase is having issues with the SEC as it is, adding such coins is a bit of a gamble. Nevertheless, the team of Coinbase believes that this is the right thing to do.