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- Massive banks’ inflow into the stablecoin market may spell an finish for stablecoin issuers.
- Stablecoin issuers like Tether depend on banks for custody of their funds and enterprise.
- Arthur Hayes says the reliance on the banks is what makes a takeover very possible.
In a latest interview with famend cryptocurrency journalist Laura Shin, Arthur Hayes, co-founder of BitMEX and CIO at Maelstromfund, said that an inflow of massive banks like JP Morgan into the stablecoin market may spell an early demise for centralized stablecoin issuers.
Amidst the anticipated conventional firms’ inflow into crypto, Hayes said that banks will begin wanting into issuing stablecoins themselves. The founder stated stablecoin issuers like Tether at present again their property with treasury payments and deposits to make sure 1:1 parity with the US greenback.
To take action, the issuers depend on banks to take their deposits and permit them to commerce debit devices. In the end, Hayes stated stablecoin issuers can’t exist and not using a financial institution holding or clearing their funds.
Moreover, Hayes argued that given the revenue margin of firms like Tether, it’s only a matter of when earlier than large banks begin wanting into the stablecoin market. The founder said that the dearth of a defensible enterprise by stablecoin issuers and their reliance on the banks for the custody of their funds makes this extra possible.
At current, Tether is the most important stablecoin issuer with over $91 billion USDT in circulation, in accordance with information from CoinMarketCap. The market cap of the stablecoin makes it the third-largest on this planet, far outsizing altcoins like BNB, Solana, and XRP.
Equally, Tether’s provide far outweighs that of its closest rival, Circle, which has round $24 billion in circulation. Knowledge from DeFiLama estimates that the full stablecoin market is value round $130 billion.
In accordance with the founder, stablecoin issuers like Tether have a big market share as a result of the massive gamers within the US banking system have refused to take part. Nevertheless, that dominance might be put to the take a look at ought to banks like JP Morgan take a deep dive.
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