From debanking to a banking arms race—The rise of stablecoins
The banking industry is shifting from debanking crypto businesses to embracing stablecoins, driven by the repeal of discriminatory policies. Over half of debanking complaints in recent years were against Bank of America, JPMorgan, Wells Fargo, and Citibank. The finance sector must understand crypto to remain competitive, as the deployment of stablecoins will determine banking success. Stablecoins have potential beyond international remittances, offering faster payment cycles and efficiency in payroll processing. Smaller banks are beginning to explore public network stablecoins. Custodia Bank's launch of its stablecoin, Avit, exemplifies successful implementation. Active stablecoin wallets grew from 19.6 million to over 30 million in a year. Stablecoin infrastructure has improved, with 91% being fiat-backed. Non-crypto businesses find it easier to adopt stablecoins due to UX improvements. The financial system is evolving, with calls for the tokenization of bonds and stocks. Banks leveraging stablecoins may gain a competitive edge in a changing financial landscape.
