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Regulatory changes are required in the US for banks to participate.
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“I don’t know if it will happen soon, but it will happen,” says the director of SG-Forge.
Traditional banks are considering entering the stablecoin business, inspired by the example of Tether Limited and its USDT stablecoin.
According to representatives of traditional financial institutions such as SG-Forge, the entities want to participate in this market. Jean-Marc Stenger, CEO of SG-Forge, believes that other banks will issue their own stablecoins in the near future.
“It’s a heavy lift, I’m not sure it will happen soon, but it will happen,” he said, according to Bloomberg.
According to that agency, US banks are expected to join the trend, but once legislation is enacted that could pave the way for them to issue stablecoins.
And in Europe, thanks to the recent clarity provided by the Cryptoasset Markets Regulation (MiCA), and Tether’s decision to stop issuing its EURt stablecoin, A window of opportunity has opened for competitors that seek to offer customers options to make payments or hold assets similar to fiat currencies.
Stenger also mentioned that SG-Forge, the cryptocurrency arm of French bank Société Générale, It is already talking to several banks that want to use its stablecoin. Additionally, it is in talks with about 10 banks about partnerships and its technology to issue their own stablecoins.
In September this year, SG-Forge announced a partnership with the BitPanda exchange to create and launch your own stablecoin in euroscalled EUR CoinVertible, as reported by NoticiasVE. That stablecoin will be managed by the French unit and will comply with the European Union’s MiCA regulations, becoming the first regulated stable cryptocurrency of its type in Europe.
Apart from the SG-Forge case, Visa joined BBVA so that that bank launches its own stablecoin next year, as also reported by this medium, and is currently in talks “with many other banks.”
Cuy Sheffield, head of cryptocurrency at Visa, told Bloomberg: “We have seen demand from banks in Hong Kong, Singapore, in Brazil. “We are actively engaging with several banks around the world at various stages of the process.”
At the moment, There are numerous incentives for banks to offer stablecoins: Customers have been requesting the product, according to several financial institutions. Then there’s the profit motive: Tether is on track to close the year with more than $10 billion in net profits, according to CEO Paolo Ardoino.
Not all banks want to join
However, not all banks believe that traditional financial institutions will issue their own stablecoins. Bloomberg cited the considerations of Gibraltar-based Xapo Bank, which will not launch stablecoins because it believes that USDT is already rootedaccording to Joey García, the bank’s board director and chief legal officer.
García said: “We don’t want to be in that space, we want to be the tool that allows the efficiency of the blockchain network to interact with the legacy, the security of your bank account.”
Central banks are not wasting any time either. Many are testing or implementing central bank digital currencies (CBDCs), which could eventually replace bank-issued stablecoins in certain cases, such as wholesale payments, according to Avtar Sehra, CEO of Libre Capital, who collaborates with First Abu Dhabi Bank on token-backed loans.
“Everyone is exploring some type of commercial bank digital currency,” Sehra said. “In the end, they could issue their own. But ultimately everyone would prefer to maybe use a consortium currency.”
In any case, the traditional finance sector’s estimates of the proliferation of stablecoins, inspired by the case of USDTcontrast with the belief of Bloomberg’s own editorial boardwhich sees a potential threat with Tether for the traditional economy and traditional finance, especially due to the duo with the new US government, headed by Donald Trump, as reported by NoticiasVE.