Are stablecoins really a risk to bank deposits? Coinbase’s policy leader said ‘No’
Contrary to claims from the US banking industry, Stablecoins did not risk the financial system, according to the Crypto Exchange Policy Official Official Officer Coinbase (Coins), Theodore Shirzad. The claims of banks they make are myths made to defend their profits, he wrote in a Tueday blog post.
“The middle claim – that stablecoins will cause a mass -flow of bank deposits – not just lasting,” Shirzad wrote. “The recent review shows no significant link between adoption of stablecoin and flying deposit for community banks and there is no reason to believe that large banks are worse.”
Larger lenders still hold trillion dollars in the federal reserve and if the deposits are really at risk, he or she is arguing, they are more difficult to compete for customer funds by offering higher interest rates rather than parking lots in central bank
According to Shirzad, the real reason for the banks of banks is the payment business. Stablecoins.
He compares the current pushing of earlier battles against ATMs and online banking, when incumbents warn systemic risks but, he said, ultimately trying to protect hidden revenues.
Shirzad also removed reports that predict trillion on potential flows from deposits to Stablecoins, whose total market cap is around $ 290 billion, according to data from coingecko. He emphasized that stablecoins are primarily used as repairing tools-for trading digital assets or sending foreign funds-not as long-term savings products.
A person who bought stablecoins to live in a foreign supplier, he argued, was choosing for a better way of transaction to pass through their bank, not pulling money from a saving account.
He urged banks to embrace the technology rather than prevent it, saying that stablecoin metals can cut settlement times, lower banking costs and provide circle payments. Institutions ready to adapt, he wrote, stand to benefit from the transfer.
The UK, also faces concerns about the impact of stablecoins in the financial industry.
The financial times reported Monday that Bank of England considers setting limits on how many “systemic” stablecoins people and companies can handle – setting thresholds less than 10,000 pounds ($ 13,600) For individuals and nearly 10 million pounds for businesses.
Officials have identified systematic stablecoins as widely used for payments in the UK or expected to be like this, and say that caps are required to avoid sudden deposits of deposits that can weaken lending and financial stability.
