Can DigitalBits Make Money from Branded Stablecoins?

DigitalBits’ (XDB) business plan is to make money from loyalty points and branded stablecoins.

“What is a branded stablecoin,” Rajiv Naidoo; DigitalBits’ head of research and community asks? “Simply put it is a stablecoin supported by a brand or enterprise.”

DigitalBits is a protocol layer blockchain that allows organizations to create their own stablecoins. A company could use a DigitalBits stablecoin as a loyalty or rewards point, for instance.

Walmart (NYSE: WMT) customers; for example, could earn stablecoins each time they shop at Walmart.com. The customers could use the Walmart-branded stablecoin to make purchases through Walmart Pay, buy gift cards, or convert the stablecoin into U.S. dollars.

“Branded stablecoins will integrate directly with existing consumer applications operating within apps that consumers know,” Naidoo told the First World Stablecoin Summit. “In many cases consumers might not perceive that they are using a cryptocurrency or blockchain.”

Can DigitalBits make money from Rewards Points, Loyalty Points and Gift Cards?

The DigitalBits team estimates the global market for gift cards, rewards points, and loyalty points’ at over $200 billion.

DigitalBits plan is to build a blockchain ecosystem that will support debit cards, point of sale terminals (POS), and third-party exchange. For example, DigitalBits’ system could enable customers to deposit branded stablecoins into bank accounts or load branded stablecoins into debit cards or gift cards.

One problem DigitalBits hopes to solve is rewards points that customers can only use at specific merchants. For instance, I can only use my Kroger (NYSE: KR) rewards points at certain filling stations. I could accrue hundreds of Kroger rewards points, but if I cannot find a certain gas station, those points are worthless.

DigitalBits could solve that problem by allowing me to convert my Kroger rewards points into dollars I could spend online or deposit into my bank account. In addition, I could use a Kroger branded stablecoin to buy groceries from a Kroger website or supermarket.

What Value Does DigitalBits Have?

Currently, DigitalBits has an open-source protocol developed from the Stellar (XLM) protocol. In addition, there is the DigitalBits Token (XDB) an Ethereum-based cryptocurrency.  

DigitalBits has an interesting business plan. The business plan is to market branded cryptocurrencies to consumer products companies such as Walmart. In fact, former Walmart Chief Marketing Officer Julie Lyle is an advisor to DigitalBits. Conversely, there is no apparent connection between DigitalBits and Walmart (WMT).

Ironically, the DigitalBits Token (XDB) is not a stablecoin. Instead, the XDB is a non-inflationary Ethereum token focused on existing app integration. DigitalBits claims XDB is highly scalable and capable of processing up to 10,000 transactions per second (TPS).

Are Branded Stablecoins For Real?

In they addition, they designed the DigitalBits Token (XDB) to support many assets including fiat currencies, loyalty points, gift cards, rewards points, cryptocurrencies, and commodities. Hence, you could theoretically convert XDB into Euros, rewards points, or gold.

However, there is no evidence DigitalBits has built any branded stablecoins. However, some large companies are experimenting with branded stablecoins.

What Value Does DigitalBits Have?

For instance, CoinDesk reports Walmart (WMT) has filed for a stablecoin patent. In addition, Naidoo thinks Facebook’s (FB) infamous Project Libra is a stablecoin scheme.

Mr. Market however does not share DigitalBits’ faith in branded Stableoins. On 2 September 2020, CoinMarketCap gave DigitalBits (XDB)a Coin Price of 1.9₵ , a 24-Hour Market Volume of $605,509,  and a Market Capitalization of $7.098 million. CoinMarketCap based those prices on a Circulating Supply of 368.471 million XDB and a Total Supply of 1.5 billion.

I think DigitalBits’ Coin Price is so low because XDB has little value. Thus, I consider XDB a speculative cryptocurrency. However, I think DigitalBits is a blockchain developer to watch. Despite that, I recommend speculators stay away from DigitalBits (XDB) until they demonstrate a working branded stablecoin.