Envious of Tether’s billions of profits, banks are scrambling to issue stablecoins

Written by Zhang Yaqi, Wall Street News

Stable currency USDT, this crypto The world's "stabilizing force" is quietly subverting the traditional financial industry.

More and more banks are beginning to get involved in the stablecoin market. According to Bloomberg, Societe Generale, Germany's Oddo BHF, Britain's Revolut, and even the Hong Kong Monetary Authority have begun to deploy stablecoins in the hope of getting a piece of the pie in this field.

Previously, the world’s largest stablecoin issuer Tether Holdings Ltd. expects net profit to exceed 10 billion in 2024. CEO Paolo Ardoino said in an interview that the company has invested more than half of its net profit this year.

Naveen Mallela, global co-head of Kinexys, the digital asset division of JPMorgan Chase, said that stablecoins issued by banks are expected to accelerate their development and become mainstream products in the next three years. With the improvement of policy frameworks and technological advances, stablecoins are expected to become an important part of the future financial market.

Financial institutions areXiaobai NavigationActively exploring the issuance of stablecoins

Faced with such an attractive "cake", banks can't sit still. In Europe, financial institutions are actively exploring the issuance of stablecoins. Forge, a subsidiary of Societe Generale, has launched a euro-backed stablecoin to retail investors.

Meanwhile, Oddo BHF SCA is also developing a euro-denominated version, while London-based Revolut is considering issuing its own version of the stablecoin.

One of the driving factors behind this trend is the policy clarity brought about by the European Crypto-Asset Market Regulation (MICA).ether’s decision to halt the issuance of its EURt stablecoin provides a market opportunity for other banks.

SG-Forge CEO Jean-Marc Stenger said in an interview that they are in talks with several banks about using their stablecoins, and are discussing cooperation or white-label technology licensing with about 10 banks so that these banks can issue their own stablecoins:

“Do I think other banks will issue their own stablecoins? The answer is yes. It’s a lot of work and I’m not sure it will happen quickly, but it will happen.”

Visa is also actively promoting the development of stablecoins around the world, not just in Europe. In October, Visa launched a platform for banks to issue stablecoins.TokenThe network is being developed and a pilot is planned with BBVA in 2025.cryptocurrencyDirector Cuy Sheffield revealed that banks from Hong Kong, Singapore and Brazil have shown strong interest in stablecoins, and Visa is working with several banks around the world.

Standard Chartered Bank is also actively involved and has been selected by the Hong Kong Monetary Authority as one of the first issuers of the Hong Kong dollar stablecoin, which is scheduled to go online in 2025. Rene Michau, global head of digital assets at Standard Chartered Bank, said that this move will further strengthenBlockchainAs for its role in payments, the bank hopes to launch a stablecoin in 2025.

Risks and challenges of stablecoin issuance

Deposits that big banks like JPMorgan Chase are exploringTokenIn comparison, stablecoins have broader application prospects.

存款Token通常只能在同一银行的客户之间转移，而稳定币可以被任何拥有加密walletJPMorgan Chase believes that stablecoins and deposit tokens are not mutually exclusive, and expects that bank-issued stablecoins will accelerate and become mainstream in the next three years.

However, there are risks in issuing stablecoins.

ECB research shows that if a large amount of retail deposits are converted into stablecoins, banks' liquidity coverage ratios may be affected.

In addition, U.S. regulators also need to clarify the types of acceptable reserves for banks issuing stablecoins and whether stablecoin deposits are protected by insurance. Hilary Allen, a law professor at American University, warned that if banks issue uninsured stablecoins and insured deposits at the same time, it may cause confusion among consumers and may cause panic in times of crisis.

Currently, many central banks are testing or launching central bank digital currencies (CBDCs), which could replace bank-issued stablecoins in certain use cases, particularly in the wholesale payments sector.

Faced with such a complex situation, Avtar Sehra, CEO of Libre Capital, said:

“Every bank is exploring some form of commercial bank digital currency, but ultimately they may be more inclined to use consortium coins.”

The article comes from the Internet:Envious of Tether’s billions of profits, banks are scrambling to issue stablecoins

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