BitMEX’s Co-Founder Says Bitcoin May Never Replace TradFi

Arthur Hayes, the Co-Founder of crypto exchange BitMEX, recently shared his thoughts on stablecoins amid the turmoil in the crypto industry that has left crypto bank Silvergate struggling in its wake. In an op-ed piece titled “Dust on Crust”, Hayes, who also serves as the Chief Investment Officer of Maelstrom Fund, stated that stablecoins were crucial to enhance decentralization in the crypto space.

According to the op-ed on Medium, Hayes believes that many people in the crypto industry have built projects and businesses on top of “dubious, crusty, and brittle foundations. Stablecoins are apparently one of these foundations, which serve as the bridge between traditional finance and the crypto vision laid out by Satoshi Nakamoto.

Hayes believes that stablecoins remove the need for fiat currencies like the U.S. Dollar for purchasing Bitcoins. However, for Bitcoin to be able to become the largest currency in the world, its adoption would have to reach a level where it is used to pay for goods and services and wages.

Elaborating more on the flagship crypto’s potential to replace banking and other traditional finance (TradFi) services, BitMEX co-founder stated, “If we are successful, many will earn Bitcoin by working, and thus remove the need to use banking services. But for all our effort, there is still a chance that we will never reach this ultimate state,”.

According to Hayes, stablecoins aren’t meant to be a proponent of decentralization. They just serve as the bridge between centralized and decentralized finance. To that end, he believes that overcollateralized stablecoins like MakerDAO/ DAI are “fundamentally unnecessary.

As for the current turmoil in the crypto industry, Hayes warns that industry leaders must come together and create a new product to offset the damage from traditional banks like Silvergate’s decision to stop catering to stablecoins such as USD Coin (USDC) and Binance USD (BUSD).