30 Indian Minds Leading the AI Revolution

Europe Could Lead the IoT Development with Stablecoins, Says Digital Euro Association Report

The report highlights the potential for growth in machine-to-machine (M2M) payments, with stablecoins being particularly advantageous in this field

By Shashank Bhardwaj

Published: Mar 10, 2023 05:21:30 PM IST

Full Bio

Image: Shutterstock

The Digital Euro Association has released a report suggesting that Europe has the potential to become a leader in the development of the Internet of Things (IoT) by utilising stablecoins.

The report highlights the potential for growth in machine-to-machine (M2M) payments, with stablecoins being particularly advantageous in this field.

Micropayments between machines are increasingly being utilised in both industrial and household settings, such as paying fees for shipping containers and logistics, 3D printing, cloud storage, and other services based on usage.

However, the high volume of these payments and their structural limitations, such as the requirement for layering application programming interfaces (APIs), pose obstacles to their widespread adoption.

The report suggests that stablecoins have the potential to enhance scalability, eliminate intermediaries and alleviate the issues of usability and security that arise due to APIs. The use of stablecoins could also reduce the risk of human error.

Europe has the opportunity to leverage stablecoin technology more effectively through M2M payments, as many of the features of stablecoins are better suited for other use cases.

While stablecoins have typically been used to enhance financial inclusion or lower the costs of cross-border remittances, which may not be as relevant in Europe, M2M payments provide a unique opportunity for Europe to take advantage of stablecoin technology.

Although the use of distributed ledger technology (DLT) for M2M payments is being heavily researched, the European Central Bank has not given it high priority for the design of a digital euro. As a result, stablecoin integration may become increasingly relevant in the future.

The report emphasises the importance of regulators supporting the growth of M2M payments and the IoT, as they are critical to maintaining the competitiveness of the European digital economy on a global level.

Additionally, the report highlights the need for regulators to address several key issues before the full potential of stablecoins can be realised. These issues include the development of a framework for machine identity, standardisation of stablecoin interoperability, and guidance for unhosted wallets, among other concerns.

Shashank is the founder of yMedia. He ventured into crypto in 2013 and is an ETH maximalist. Twitter: @bhardwajshash