With the introduction of the GENIUS Act, expected to regulate stablecoins, a significant shift towards traditional finance may occur. Analysts are monitoring the developments closely.
Ethereum at the Core of Stablecoins
Most stablecoins rely on blockchains like Ethereum to function. According to Bank of America's recent digital asset research titled 'On Chain', Ethereum is positioned as a key infrastructure element for both private and institutional stablecoin use. Currently, over 50% of all circulating stablecoins are on Ethereum, making it ideal for handling large-scale payments.
Traditional Banks Get Involved
Traditional banks are increasingly participating in the crypto space. In June, JPMorgan launched a tokenized deposit coin on an Ethereum-based blockchain, while BNY Mellon is working with Ripple on its new USD stablecoin, indicating a growing interest from legacy institutions.
Payments Giants Are Already on Board
Companies like Visa, Mastercard, and PayPal have been preparing for this paradigm shift for years. Visa processed its first stablecoin transaction with USDC in 2020, while Mastercard is collaborating with Circle to enable stablecoin payments. PayPal launched its own stablecoin, PYUSD, in 2023.
Although it may take several years for full stablecoin adoption, the timeline could accelerate with new regulations and increasing institutional involvement.
