Banks must build their own stablecoin to counter big tech
The big five, Facebook, Amazon, Apple, Microsoft and Google (FAAMG) are continuing to chip away at the banks.
Facebook has announced Libra, a stablecoin to be used for payment in WhatsApp and Facebook Messenger. Libra is a stablecoin pegged to a basket of traditional currencies to minimize fluctuation of its value.
Banks must realize who their real competitors are and form new alliances to address these new threats.
Instant, low-cost international payments are a perfect catalyst for this. Banks should adopt a federated stablecoin that enables instant, low-cost international payments to compete with Libra and other initiatives. This stablecoin must be bank-grade, meaning it is secure, safe, fungible between multiple issuers and with clear sight of source of funds to support robust AML and sanctions screening.
Banks must stop worrying about the competition from peer banks. The real threat is from the large tech companies.
Customers want fast, affordable cross-border payments. Who do you go to (or, perhaps, who did you go to) when you need to make a payment? That’s right— your bank. Does your bank provide such a service? No. As a result, there is a gap between supply and demand. When incumbents don’t fill the gap, someone else does. Always. This is what leads to disruption. In most cases it’s not the technology itself that disrupts, but new business models.
This time is no different. Several stablecoin initiatives have recently been launched (or are in the works) that fill the gap for an instant, low-cost international payment without the involvement of banks.
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Cryptocurrency expert says Bitcoin, Stablecoin payments will be accepted by more businesses
More companies will accept cryptocurrency as payment, especially Bitcoin and Stablecoin, Voyager Digital CEO Steve Ehrlich told FOX Business’ Maria Bartiromo on “Mornings with Maria” Tuesday.
MIAMI TO HOST LARGEST CRYPTOCURRENCY CONFERENCE IN HISTORY
STEVE EHRLICH: I think there’s going to be more, you know, more companies accepting crypto. I think one of the other things are Stablecoins there, and I think there will be more companies accepting Stablecoins as the first step then they will start accepting Bitcoin.
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That’s a growing population. Us at Voyager, we’re already seeing that as… our business caters to small and mid-sized businesses as well as retail consumers.
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Those small mid-sized businesses want to accept USDC Stablecoin, they want to accept Bitcoin and they want to hold some of their Treasury in both of them because you can earn interest on those as well as use them in everyday payment.
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