Stablecoins Key Legislation Passes Amid Concerns Over Adoption Rates
A landmark US Senate bill signals potential legalization, but Moody’s analysts suggest adoption may not proceed as rapidly as crypto proponents predict.
ACTION: US Senate passes landmark bill potentially legalizing stablecoin issuance in the United States, promising to spur innovation in blockchain payments.
CONTENTION (Crypto Supporters): Once federal approval arrives, thousands of new stablecoins will flood the market, challenging dominant players like Tether and Circle.
Meanwhile: Senior Moody’s analysts caution that widespread stablecoin adoption faces significant hurdles.
“I don’t think there will be a tremendous flow of new issuers… Or do you have other solutions?” – Cristiano Ventricelli, Moody’s Senior Digital Assets Analyst
Key Concerns Highlighted:
- Bankroll-Back Requirements: Creating audited fiat reserves for new stablecoins is complex, costly and potentially unnecessary.
- Alternative Solutions Exist: Examples include tokenized bank deposits (J.P. Morgan, HSBC, Deutsche Bank) for efficient payments.
- Retail Token Fragmentation: Major retailers pursuing independent stablecoins risk creating incompatible voucher systems, burdening consumers.
- Liquidity Challenges: Swapping different retail stablecoins would require deep, cross-token pools of liquidity.
Conclusion: While stablecoins may gain some traction, Moody’s cautions against media hype suggesting mass-market adoption by traditional financial and retail institutions.
