Regulatory uncertainty surrounding stablecoins could deal a bigger blow to banks, Cointelegraph reported on March 15, citing Mega Matrix Vice President Colin Butler (콜린 버틀러).
Butler said financial institutions have already made large investments in digital asset infrastructure, but cannot fully use them because regulations are unclear.
Banks have already built groundwork to support stablecoins, including JPMorgan's blockchain payments network Onyx, BNY Mellon's digital asset custody service and Citigroup's tokenised deposit tests, but regulatory uncertainty is blocking expansion, the report said. By contrast, crypto companies are likely to keep operating in existing regulatory grey areas.
Butler also pointed to stablecoin platform yields being far higher than bank deposits. Crypto exchanges offer 4 to 5 percent interest on stablecoin balances, while the average U.S. bank deposit rate does not reach 0.5 percent. He cited past shifts of funds to money market funds in the 1970s and said depositors are likely to move quickly in search of higher returns.
Chi-gyu Hwang
delight@d-today.co.kr