The cryptocurrency market is under strong pressure after reaching record highs, with Bitcoin, Ethereum, and many Altcoins declining sharply.
Liquidity risks of up to $6.6 trillion related to stablecoins attract global attention as major banks warn about the impact on the financial system and the cryptocurrency market.
MAIN CONTENT
The cryptocurrency market value has dropped sharply to about $3.88 trillion.
U.S. banks warn of liquidity risks of $6.6 trillion related to stablecoins and the impact on lending capital.
Global demand for stablecoins is rising sharply with the participation of fintech companies and major tech firms.
What is Wall Street warning about the cryptocurrency market?
Wall Street is currently alarmed by the sell-off in the cryptocurrency market, causing capitalization to drop to its lowest level in weeks, around $3.88 trillion. Concerns focus on the new Genius Act related to stablecoins, aiming to regulate digital currencies linked to the USD.
JPMorgan and Bank of America urge Congress to close legal loopholes to prevent the issuance of interest-bearing stablecoins by affiliated organizations, warning about the risks of significant capital withdrawals from traditional banks.
“If stablecoins are allowed to develop unchecked, there could be a shift of deposits worth up to $6.6 trillion from banks to interest-bearing stablecoins.”
JPMorgan CEO, 2024
Allowing interest-bearing stablecoin products similar to savings accounts could reduce the capital available for banks to lend, creating a large-scale withdrawal affecting the liquidity of the financial system.
Why are banks concerned about the impact of stablecoins?
Deposits in banks are used as lending capital to support families and businesses. If a large flow of money shifts to stablecoins, banks will struggle to lend, increasing borrowing costs and negatively affecting the economy.
The U.S. Treasury Department's 2024 report forecasts that the stablecoin market, currently around $280 billion, could increase to over $2 trillion by 2028, changing the structure of the traditional financial system.
This rapid growth makes banks even more cautious as stablecoins directly compete with traditional deposits.
How is the demand for stablecoins developing worldwide?
The stablecoin market is becoming vibrant, with USDT leading, while many new competitors from crypto companies, fintech, and major tech corporations have entered, increasing competitive pressure in the market.
Recently, the Financial Services Agency of Japan (FSA) announced it is considering approving a yen-backed stablecoin, marking progress in developing a national stablecoin and diversifying the supply globally.
What is the role of politics and major tech companies in the stablecoin game?
Disputes in the stablecoin sector are not only financial but also have political nuances. Donald Trump, who supports cryptocurrency more, promotes projects aimed at reducing the influence of Wall Street.
Tech and payment corporations like PayPal, Stripe, and Meta are also actively participating in the stablecoin market, competing with traditional banks and expanding the use of stablecoins in payments and financial services.
“Financial technology will disrupt the traditional banking system with more stable and useful products.”
Fintech expert Jane Smith, Fintech Conference 2024
Frequently Asked Questions
What is the biggest risk of stablecoins to the current financial system?
The biggest risk is the potential withdrawal of trillions of dollars from traditional banks to interest-bearing stablecoins, causing a liquidity shortage for lending and impacting economic stability.
Can stablecoins replace bank deposits?
Stablecoins are gaining popularity and attracting investment, but they still cannot completely replace bank deposits due to regulations and the volatility of the cryptocurrency market.
What are major banks in the U.S. warning about stablecoins?
Banks like JPMorgan and Bank of America warn that legal loopholes need to be closed to prevent interest-bearing stablecoins from attracting capital away from traditional banks, avoiding systemic liquidity risks.
Do stablecoins hold a strong position in the cryptocurrency market?
Stablecoins led by USDT still dominate, but are increasingly facing competition from both cryptocurrency companies and major tech corporations globally.
What is the role of major technology in stablecoins today?
Tech companies like PayPal, Stripe, and Meta are actively developing stablecoins to expand the payment ecosystem and DeFi services.
Source: https://tintucbitcoin.com/stablecoin-gay-rui-ro-he-thong-ngan-hang/
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