The legal framework for stablecoins in the U.S. is being completed, with significant expected impacts on the traditional banking system and payment market in the next 2-3 years.
New regulations drive the growth of stablecoin from $25 to $75 billion, while boosting demand for short-term U.S. Treasury bonds and opening up cross-border payment development opportunities.
MAIN CONTENT
The legal framework for stablecoins in the U.S. has been approved, facilitating strong market development.
Stablecoins can disrupt the source of traditional bank deposits and the domestic payment system.
Large banks are starting to invest in cross-border payment services related to stablecoins.
How has the legal framework for stablecoins in the U.S. been completed?
President Joe Biden has signed the GENIUS Act to establish the first legal framework for stablecoins, demonstrating a commitment to creating a stable legal environment for the development of this digital asset.
The new legal framework is built on the coordination of regulatory agencies to ensure transparency and safety for users, creating a solid legal foundation for the sustainable development of stablecoins. According to a report from Bank of America Merrill Lynch published in July 2023, these regulations will take effect in the coming years, helping to mitigate risks associated with stablecoins.
What impact do stablecoins have on the traditional banking and payment system?
Experts at Bank of America believe that stablecoins have the potential to disrupt traditional bank deposit models and the domestic payment system in the next 2 to 3 years. The stablecoin market is predicted to expand by $25 to $75 billion in the short term, creating competitive pressure on bank deposit funding.
This means that traditional deposit funds may shift to stablecoins, leading to significant changes in the capital structure of banks. In addition, stablecoins are expected to promote faster and more convenient payment transactions, helping to reduce costs and increase efficiency compared to traditional payment systems.
Stablecoins will reshape the flow of capital, change the traditional banking market, and open up new payment services on an unprecedented scale.
Mary Callahan Erdoes, CEO of JPMorgan Chase, 2023
What services have large banks implemented related to stablecoins?
JPMorgan Chase and Bank of New York Mellon have led the development of services related to stablecoins and digital assets. JPMorgan has created a deposit Token that facilitates quick conversions between traditional money and cryptocurrency.
Bank of New York Mellon implements custodial services for digital assets to enhance trust and security for institutional investors. These banks, while still cautious with domestic payment applications, appreciate the potential for cross-border payments with stablecoins, viewing this as a market with many growth opportunities.
Cross-border transactions using stablecoins will create competitive advantages, reduce transfer costs and processing times compared to traditional methods.
Brian Brooks, blockchain expert and former CEO of a cryptocurrency exchange, 2023
How is stablecoin growth and its impact on U.S. Treasury bonds?
The stablecoin market is expected to grow significantly, adding between $25 to $75 billion in capitalization in the first year after the new law comes into effect. This leads to increased demand for short-term U.S. Treasury bonds as stablecoins are often backed by safe assets like bonds.
According to a report from Bank of America Merrill Lynch, this linkage creates a positive spillover effect for the U.S. financial market, reinforcing the position of Treasury bonds as a liquidity and capital safety instrument for stablecoins.
Frequently Asked Questions
What are the highlights of the new stablecoin legal framework in the U.S.?
The new legal framework signed by the U.S. President imposes strict regulations on management, ensuring safety and transparency for stablecoins, facilitating sustainable development for the cryptocurrency market. (Source: Bank of America Merrill Lynch, 2023)
How do stablecoins affect the traditional banking system?
Stablecoins can reduce traditional bank deposits and alter the domestic payment structure by providing faster, more convenient, and lower-cost payment solutions. (Source: Bank of America report, 2023)
How have large banks adopted stablecoins?
JPMorgan and Bank of New York Mellon implement deposit Tokens and custodial services for cryptocurrencies, focusing on developing cross-border payments with stablecoins. (Source: Banks, 2023)
How much is the stablecoin market expected to grow in the short term?
Expected to increase by $25 to $75 billion in the next 2-3 years, boosting demand for short-term U.S. Treasury bonds. (Source: Bank of America Merrill Lynch, 2023)
What are the advantages of cross-border payments with stablecoins?
Helps reduce costs, transfer times, and increase convenience compared to traditional methods, opening up significant growth opportunities for banks and fintech. (Source: Brian Brooks, 2023)
Source: https://tintucbitcoin.com/stablecoin-anh-huong-manh-he-thong-tai-chinh/
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