Stablecoins are the big thing right now; It seems that each government, institution and large bank either issue or calculate how to integrate or law for them.
Just this month Jamie Dimon confirmed to jpmorgan (Nasdaq: JPM) ramping up the activity in Stablecoins, Citigroups (Nasdaq: c) CEO revealed that it explores its own coin and Bank of America (BOA) (Nasdaq: Bac) signaled plans to start one when regulations illustrate how to do things legal.
Boa and the other banks did not have to wait long. On July 17, the US house passed Genius. It determines the rules for the growing Stablecoin sector, which means that banks and institutions now have the clarity they need.
Payment giants as a visa (Nasdaq: v), Mastercard (Nasdaq: v) and paypal (Nasdaq: Pypl) has also signaled strong support for Stablecoins. PayPal Integrated ArbitrumWhile Mastercard has begun to support circle (Nasdaq: CRCL) transactions. Ripple Lapped Bny Mellon (Nasdaq: BK) as its reserve repositories. Rlusd now has over $ 500 million in circulation.
There is a lot of movement in a few short weeks, and everything comes to regulatory clarity. Genius ACT prescribes that in the world’s largest economy, Stablecoin Race are on.
Bank of England Governor lets the alarm
But not all are optimistic when it comes to Stablecoins. The Governor of the Bank of England (Boe), Andrew Bailey, warned the world’s largest banks not to issue them in a new interview with The Times.
Bailey highlighted how StableCoin -Reserves Must a ring cot and therefore cannot be used for bank lending activities. He would prefer the banks to stay with tokenized deposits that act as blockchain-based equivalents to conventional deposits.
Funds set aside for Stablecoins are not only bad for banks – it is also bad for the economy. A credit crisis (or decrease) will have a negative impact on economic growth and banks Can meet solvency issues If deposits go too low.
Despite Bailey’s reservations, Bank of England will be one of two Stablecoin supervision authorities in the UK and will exclusively monitor the largest issuers.
Why is the Trump administration so keen on Stablecoins?
From first day, Donald Trump has made it clear that Stablecoins are at the top of his priority list. Trump issued an executive order early on to demand that digital currency legislation be prioritized and prohibit the creation of a Central Bank digital currency (CBDC).
But he does not facilitate a free for everyone; Regulated Stablecoins must be supported by high quality liquid assets (HQLA). Of course, the safest, most liquid asset of them is all US state funds.
At different times, the Finance Ministry Scott Bessent and Trade Secretary Howard Lutnick emphasized how Stablecoins will play a key role in the Trump administration’s plan for USD -dominance. Lutnick’s company, Cantor Fitzgerald (Nasdaq: ZCFIIX), is a stakeholder of 5% in TetherBut he divested before entering the government.
Speaking of Tether …
Clutch has a colorful story, And given all that has been involved in, some would say that it has had a good driving.
Although it is likely to continue to exist in some form, the above Genius Act will cause problems for the world’s largest Stablecoin issuer. Just like Glimmer rules Drove it out of Europe, Genius Act could do the same in the United States.
Why so? The law requires 1: 1 support with USD and Treasury, but Tether has always claimed that it is supported by several assets. Large issuers must submit to annual independent audits, but Tether has never agreed to one.
Worse for Tether, Stablecoin issuers are regarded as financial institutions under the Banking General Act. According to these rules, they must carry out robust AML/KYC checks and compliance with OFAC sanctions. It will not bode well for a company that prefers to drive from the shadows.
Genius Act provides an 18-36 month window for compliance. The countdown is on for Tether to review his structure or leave the US market.
Look at | Spotlight on: Centi Franc – the truly stable Stablecoin
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