Contrary to the claim of the US banking industry, stableecoins do not pose a risk to the financial system, according to Chief Policy Officer at Crypto Exchange Coinbase (COIN)FARYAR Shirzad. Banks claim that they do are myths designed to defend their revenue, he wrote in a TUEDAY blog post.
“The central claim – that stableecoins will cause a mass outflow of bank deposits – simply does not stop,” Shirzad wrote. “Recent analysis shows no meaningful connection between stableecoin resolution and payment flights for community banks, and there is no reason to believe that big banks would make worse.”
Larger lenders still have trillions of dollars in the Federal Reserve, and if deposits were really in danger, he argued, they would compete harder for customer funds by offering higher interest rates rather than parking contains in the central bank
According to Shirzad, the real cause of the banks’ resistance is the payment company. Stableecoins, digital tokens, whose value is linked to a real asset like dollar, offers faster and cheaper ways to move money and threaten an estimated $ 187 billion in annual swipe fees for traditional map networks and banks.
He compared the current pushback with previous matches against ATMs and online banking when the established companies warned of systemic dangers, but, he said, ultimately tried to protect anchored profits.
Shirzad also rejected reports that predicted trillion in potential outflows from deposits to stablecoins, whose total market cap is about $ 290 billion, according to CoingeCKO data. He emphasized that stableecoins are primarily used as payment tools-for trade in digital assets or sending funds abroad-not so long-term savings products.
A person who buys stableecoins to settle with an overseas supplier, he claimed, chooses a more effective transaction method that goes through their bank and does not withdraw money from a savings account.
He urged banks to embrace the technology instead of resisting it, saying stableecoin rails could reduce settlement times, lower correspondent railway comments and give around the clock. The institutions that are willing to adapt, he wrote, stands to take advantage of the shift.
The United Kingdom is also facing concern about the impact of stableecoins on the financial industry.
Financial Times reported on Monday that the Bank of England is considering setting limits on how many “systemic” stablecoin’s people and businesses can have – to put thresholds as low as £ 10,000 ($ 13,600) For individuals and approx. 10 million pounds for businesses.
Officials define systemic stableecoins as those who are already widely used for UK payments or are expected to be so, saying the hoods are needed to prevent sudden deposit outflow that may weaken lending and financial stability.
