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Stablecoin Concerns - CryptoNews
Citigroup’s Ronit Ghose warned that Stablecoin interest payments could trigger 1980s-style deposit flight from traditional banks when money market funds skyrocketed from $4 billion to $235 billion. This drained deposits from banks whose deposit rates were tightly regulated. The warning comes as major U.S. banking groups lobby Congress to close what they call a “loophole” in the GENIUS Act that allows crypto exchanges and affiliated businesses to offer yields on Stablecoins issued by third parties such as Circle and Tether. Treasury Department estimates yield-bearing Stablecoins could result in up to $6.6 trillion in deposit outflows, which could change how banks fund loans and manage liquidity. Bank deposits serve as the primary funding source for loans to businesses and consumers, meaning large-scale outflows could tighten credit availability and push borrowing costs higher across the economy.
Why does this matter to you? Your loan rates could go up if borrowing from a traditional bank.
Hot take: Here we go. Banks definitely don’t like the fact they could lose trillions, I mean TRILLIONS, of dollars to the Stablecoin movement. I mean, they’ve worked so hard cheating, I mean, earning their money throughout the years so why wouldn’t they be mad? At the end of the day, the fintech is evolving and banks must adapt or be ready to die. Then again, this goes back to if Stablecoins have more money tied to the US Dollar and it’s devaluing, where would Stablecoins end up. This was one of the reasons Bitcoin was created to GET AWAY from the USD, yet we’re going right back to it. Make your money on Stablecoins and their distributing companies while you can but there seems to be an end in sight.
Ripple Stablecoin to Japan - Ripple
Ripple, a leader in blockchain and crypto solutions, and SBI Holdings, a major Japanese financial services conglomerate, and its subsidiary SBI VC Trade announced their intention to distribute Ripple USD (RLUSD) in Japan. According to Ripple, RLUSD is fully backed by high-quality reserves, including U.S. dollar deposits, short-term U.S. government bonds, and other cash equivalents, with monthly attestations from a third-party accounting firm.
Why does this matter to you? Maybe if you’re involved with SBI group but for the most part, it shouldn’t impact us, here in the US, just yet.
Hot take: Ripple takes its talents across the pond to Japan with RLUSD. Stablecoins are now going global and truly connecting the world on an institutional level. Like I’ve always said, great in the short term for Blockchain integration but still concerning long term because it’s still tied to a fiat currency.
Circle Stablecoin + Mastercard to Europe, Middle East & Africa - Mastercard
Mastercard and Circle are deepening their longstanding partnership to enable Circle Stablecoins USDC and EURC settlements for acquirers in the Eastern Europe, Middle East, and Africa (EEMEA) region. This marks the first time that the acquiring ecosystem in EEMEA will be able to settle transactions in stablecoins. This move will empower acquiring institutions to get their settlement in USDC or EURC, which they can then use to settle with merchants.
Why does this matter to you? Same as above, unless you’re in that region and involved with that instituion, it won’t impact us that much in the US. However, it continues to show the web that Stablecoins continue to grow.
Hot Take: Same as above. Love the colloboration between Mastercard and Circle, and I’m here for a good time, not a long time.
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