Major banks and financial companies are rushing to introduce their own cryptocurrency stablecoins backed by the US dollar after the signing of the GENIUS Act by President Trump in July. The move aims to leverage cryptocurrencies for faster, convenient cross-border payments.
However, full adoption may take years as more regulation is required to outline how they will be used. The new regulations will require companies to prove the need and use for their own stablecoin, a process that non-banks may find complicated.
Companies like banks have an easier time adopting stablecoins due to existing know-your-customer (KYC) protocols. However, they still face challenges such as adjusting calculations for liquidity if they hold stablecoins on their balance sheet.
The use of blockchain technology and token issuance also pose questions, with some stablecoins being private while others are public and viewable by anyone. Despite the benefits of stablecoins over volatile coins, there are concerns about their flaws and potential risks.
The US government’s shift in stance on cryptocurrencies marks a significant change from past years, when most politicians highlighted the need for regulation to prevent scams and criminal activity. The new Trump administration has taken a more dovish approach, with top officials like President Trump having netted hundreds of millions of dollars from their own memecoins.
The approval process is lengthy, but companies are eager to take advantage of the regulations outlined in the GENIUS Act. As the industry regulation is put in place, it may still be years before banks and institutions fully adopt stablecoins.
Source: https://www.tomshardware.com/tech-industry/cryptocurrency/stablecoins-gain-critical-mass-after-genius-act-cements-rules-banks-and-companies-rush-to-register-new-coins