The Difference Between Stablecoins and Points

The "points" we use in our daily lives and the "stablecoins" that have been attracting attention in recent years. What exactly is the difference between these two types of "digital value"?

In this article, I would like to explain their essence in an easy-to-understand manner.

What are points?

First, let's talk about "points." Everyone has likely used at least one type, such as Rakuten Points or V-Points. I am one of those people myself.

In conclusion, these are like "tickets exclusive to an economic zone" issued by companies to encourage customers to return. While they are very convenient and offer good value, their use is limited to the "economic zone created by that company."

Furthermore, as a general rule, they cannot be freely sent to strangers or withdrawn as cash; they are essentially marketing vouchers over which the company retains control.

What are stablecoins?

On the other hand, "stablecoins" like JPYC or USDC are created for a completely different purpose. They are "digital cash for an open world" based on blockchain technology.

They are designed to have the same value as fiat currency, such as "1 coin = 1 yen" or "1 coin = 1 dollar," and are generally not bound by the rules of any specific company.

As long as you have a wallet compatible with the internet and blockchain, you can, in principle, instantly exchange money with anyone in the world, 24 hours a day, 365 days a year, across borders.

The core difference

The biggest difference between these two lies in whether they are "closed" or "open."

Points are a value that exists only within a limited space, such as a company's partner network. Because the value and usage can be easily changed at the company's convenience—such as through service termination or unfavorable changes to redemption rates—the "points" system is ultimately structured so that the business benefits while the user loses out.

In contrast, stablecoins flow constantly on a "global common infrastructure" known as a public blockchain. Their great strength—which points lack—is that they do not depend on any specific company and can be moved freely across borders as your own assets within the scope of self-responsibility and self-management.

Three decisive differences

We have explained stablecoins and points so far, but from here on, let's organize the subtle differences between the two into three points to deepen our understanding.

The first is "management and scope of use." While points are managed by a single company, stablecoins are managed on a global network.

The second is "freedom of remittance." Points have restrictions on person-to-person transfers, whereas stablecoins allow for free peer-to-peer (P2P) transfers.

The final third point is "programmability." Stablecoins can be incorporated into automated payment programs, such as "automatically paying for goods upon delivery," enabling advanced financial transactions that simple points cannot offer.

Conclusion

While both appear similar in that their value is fixed, such as "1 point = 1 yen" or "1 coin = 1 yen," their roles are completely different.

Points are "convenient vouchers" intended to enrich shopping within a specific economic sphere. On the other hand, because their value and usage can be easily changed at the convenience of the issuing company—such as through service termination or unfavorable changes to redemption rates—the system is ultimately designed for the business to profit while the user loses out, which is a challenge inherent to all points. What will significantly change those points is the next-generation digital currency known as stablecoins.

Stablecoins constantly flow on a "global common infrastructure" called a public blockchain. They do not depend on any specific company and can be moved freely across borders as your own assets within the scope of self-responsibility and self-management.

In recent years, there are many people who are enthusiastic about points, to the extent that the term "poi-katsu" (point-earning activities) has emerged. However, I strongly assert here that while points are "convenient vouchers" intended to enrich shopping within a specific economic sphere, you should understand that they are a system where value and usage can be easily changed at the convenience of the issuing company—such as through service termination or unfavorable changes to redemption rates—ultimately resulting in a structure where the business profits and the user loses.

Stablecoins are superior to points. Points basically have nothing backing them and are naturally worthless, but the mechanism that allows points to be exchanged for gift certificates or products is something to be praised in Japan's point culture. However, stablecoins have significantly higher asset value than points and are a field that will grow much faster than points in the future.

For those who have never used a stablecoin, I would like you to try using JPYC, Japan's first fiat-backed stablecoin, and learn about the freedom beyond points and the importance of self-responsibility and self-management.

Let's understand the characteristics of each and keep an eye on the movement of value in the future digital society.

JPYC

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