Stablecoin Competition: a Cautious Outlook

Moody’s analysts express skepticism about the anticipated surge of stablecoins following recent U.S. legislation aimed at legalizing their issuance. While crypto advocates predict a flood of new stablecoins that could challenge established players like Tether (USDT) and Circle (USDC), Moody’s Cristiano Ventricelli warns that the hype may be overstated. He emphasizes that creating stablecoins is one challenge, but establishing a sustainable business model is another. Major banks might consider launching their own stablecoins for efficient cross-border payments, yet the complexity and cost of creating a new dollar-pegged currency could deter them. Retail giants like Amazon and Walmart are also exploring stablecoin options, but Ventricelli doubts the practicality of multiple tokens for different retailers, which could lead to consumer confusion and liquidity issues. The potential for deep liquidity markets for these tokens remains uncertain, raising questions about whether stablecoins can genuinely address real-world payment challenges. Ultimately, the mere possibility of issuing stablecoins does not guarantee widespread adoption. Read more AI-generated news on: https://app.chaingpt.org/news