Unlocking Potential: New Regulations Set to Boost Stablecoin Adoption in the US ๐
Are you curious about how recent regulatory changes could impact the stablecoin market in the United States? Dive into the insights provided by American credit ratings firm S&P Global on the Lummis-Gillibrand Payment Stablecoin Act and what it means for the future of stablecoin adoption.
Regulatory Clarity Will Encourage Banks to Enter the Stablecoin Market ๐ฆ
โ The Lummis-Gillibrand Payment Stablecoin Act offers a comprehensive legislative and regulatory framework to enhance confidence in stablecoins.
โ Andrew OโNeill, managing director at S&P Global, anticipates that regulatory clarity will incentivize banks to explore opportunities in the stablecoin space.
โ If the bill is approved and relevant banking regulations follow suit, banks could gain a competitive advantage by engaging in stablecoin issuance, up to a maximum of $10 billion.
Tetherโs Dominance Could Potentially Decline ๐
โ OโNeill suggests that Tetherโs dominance in the stablecoin market may diminish as it is not considered a permitted payment stablecoin under the proposed bill.
โ U.S. entities may be restricted from holding or transacting in Tether, possibly leading to increased demand for U.S.-issued stablecoins.
โ Despite this shift, Tetherโs transaction activity primarily occurs outside the U.S. in emerging markets, driven by retail users and remittances.
Market Innovation: Emergence of New Custody Services ๐ก๏ธ
โ The removal of the Securities and Exchange Commissionโs requirement for custodians to report digital assets on their balance sheet could pave the way for more custody services in the market.
โ By eliminating this barrier, financial institutions may be more inclined to offer digital asset custody services, fostering increased competition and innovation.
Sources:
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