This article was written by Rafael Cosman and appeared on coindesk.com on February 11, 2021. It is a prime example of what’s coming regardless of whether you believe it or not.
Banks are going to move operations to the blockchain and they will either have to create a stablecoin or rely on one of the stablecoins already on the market
JP Morgan Chase the biggest bank in the United States created their own cryptocurrency exchange a few years ago and their stablecoin is tied to the U.S. Dollar. Since then, over 300 banks are using JP Morgan Chase’s exchange to transfer money overseas for their business customers.
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Banks Likely to Adopt Stablecoins Cautiously Despite Guidance
Banks face a stablecoin conundrum: Build their own projects, with all the overhead that implies, or work with well-placed existing providers.
Banks Likely to Adopt Stablecoins Cautiously Despite Guidance
Arguably, Brian Brooks has done more than anyone to spur the epic bull run of the last few months. The former head of the Office of the Comptroller of the Currency (he served from May 2020 to mid-January 2021) paved the way for U.S. banks to adopt cryptocurrency, including allowing federally regulated banks to custody digital assets and even act as stablecoin nodes.
Some saw these actions as pivotal for banks to embrace the shift to a decentralized, open-source economy. Brooks envisioned a future with “self-driving banks” in a Financial Times op-ed. However, there are good reasons to think banks will proceed with caution on adopting cryptocurrencies, and stablecoins in particular.
Rafael Cosman is the CEO and co-founder of TrustToken, makers of the digital dollar TUSD and four other global fiat-backed stablecoins.
Firstly, the OCC memo contains several explicit provisions that put significant responsibilities on banks and stablecoin issuers. These include know-your-customer (KYC) requirements and the need for “appropriate systems, controls, and practices in place to manage […] risks, including to safeguard reserve assets,” among others.
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https://www.coindesk.com/banks-stablecoins-cautiously-guidance