Blockchain Interoperability with Cross-chain Stablecoin Payments

Abstract

A Peer-to-peer payment system was one of the first proposed applications of blockchain technology. Cryptocurrencies have instead been used as a speculative investment. Stablecoins worth approximately 7 billion USD circulate the cryptocurrency market today, presenting a good case for their use in cryptocurrency payments [2]. Stablecoins have also been issued on a variety of blockchains that operate balkanized from each other. Cross-chain transfer between stablecoins is currently enabled by centralized middlemen. The actions of putting stablecoin transfer in the hands of intermediaries is a path towards centralization of control opposite to the decentralization ideology of blockchains. The inter blockchain transfer between blockchains should try to be as trustless as the intra-blockchain transfer. In this thesis, we propose an alternative system for stablecoin transfer, specifically focused on cross-chain stablecoin transfer between multiple blockchains using blockchain interoperability. We then go on to implement a stablecoin transfer between tokens that are based on two different blockchains by creating a representation of the sender token on the receiver chain.