Governments are gradually becoming more cautious with stablecoins. Meanwhile, the banks are getting hot underfoot. A top executive of United Texas Bank believes that only banks should be allowed to issue these tokens.
Banks want stablecoin monopoly
That said Scott Beck, the bank’s CEO. He spoke according to Cointelegraph Friday during the Texas Work Group Blockchain Matters Hearing in Austin. He believes that stablecoin issuance should be limited to commercial banks that have the appropriate licenses.
Parties such as Binance, Circle and Paxos are also currently allowed to issue stablecoinsn, but these companies are obviously not banks. Still, in principle, they can provide “money” in the form of these stablecoins. Normally, only banks with the right (and expensive) licenses were legally able to provide money.
One major difference is that some stablecoin issuers cover at least once the market value of the token with collateral, while banks generally lend customers’ deposits several times over. Nevertheless, in recent months it has often become apparent that there is still a lot of risk in the stablecoin market.
Beck replied to a question from payment processor MoneyGram that stablecoin issuers manage assets like non-banks, essentially drawing deposits from the banking industry. As a result, these companies compete directly with banks, while in the meantime they do not have to comply with the same strict regulations.
Governments wake up
The past few months have been a strong wake-up call for regulators. They now see through the various stablecoin fiascos that there are many risks in the concept and that it needs to be properly regulated. As a result, the regulation is gradually becoming stricter.
At the same time, some institutes seem to see some potential in it. For example, the Federal Reserve believes that stablecoins should in any case remain if they are properly regulated. This is particularly a problem for smaller banks. At the same time, the European Central Bank (ECB) wants to prevent stablecoins from getting too big – so opinions are not the same everywhere.