How a “vulnerability” can spend billions of billions of banks from banks to encryption star-news.press/wp

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The genius law has sparked a discussion with the acquisition of Stablecoins, and challenges traditional banks while pushing global interest in digital financing.

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The last passage of the genius law, which is officially organized Stablecoins in the United States, was welcomed by the encryption community, while traditional banks seemed to be alert.

Why banks are under pressure?

The genius law, designed to regulate the Stablecoin market of $ 288 billion, has caused anxiety among traditional banks.

Banking pressure, such as the American Banker Association, the Banking Policy Institute, and the Banker Consumer Association, intercepted what they described as a “loophole” in the law.

According to Financial timesThe law prevented exporters from paying the interest directly, yet the third -party exchanges allowed to provide the return on Stablecoins from Circle or Tether.

Under the new rules, banks are allowed to version their Stablecoins, but they cannot provide attention to these deposits.

This has led to fears that the exchange of encryption may attract customers looking for higher returns, and attract deposits away from traditional banks.

I have already seen the deposit trip?

Ronit Ghose, head of Citi in the future of financing, warned that the rise of the higher revenue alternatives, such as Stablecoins, can provoke a wave of external flows from traditional banks, echoing the mutation of the money market fund in the late 1970s and early 1980s.

At that time, the money market funds increased from $ 4 billion in 1975 to $ 235 billion by 1982, as bank deposits exceeded that organized interest rates made banks less competitive.

Between 1981 and 1982 alone, banks withdrawal surpassed new deposits by 32 billion dollars, according to federal reserve data.

SEAN VIREGUTz from PWC shared similar concerns, warning that if exchanges start to provide attractive returns while banks remain restricted from interest rate leaps, consumers may transfer their money collectively.

This can lead to extensive external flows of the banking system.

The encryption sounds see the climb

However, encryption supporters see this development as a transformative opportunity.

Pioneer of encryption and bitcoin lawyer Lark Davis male Stablecoins has the ability to reshape financing, provide more adaptable and competitive options compared to traditional banking services.

He argues that instead of threatening the industry, Stablecoins can push banks to innovation, creating a more dynamic financial environmental system that benefits both consumers and institutions.

He said ,

“People do not understand how the Genius has changed the game. Stablecoins = smart contracts. Smart contracts work on ethereum … and other L1s.”

Davis added,

“For every symbolic symbol in the shape of Stablecoins, the demand for Eth Blockspace grows. For this reason, institutions depend on $ ETH like their life.”

The world Stablecoin race climbs

Moreover, the batch extended beyond the United States, and Treasury Secretary Scott Pessant indicated that Stablecoins may enhance the demand for American bonds.

Meanwhile, the UK leaders of industry urged the National Stablecoin strategy, and China has explored Yuan -backed symbols to enhance its global role.

Moreover, as the United States progresses in its organizational framework, the competition intensified to control digital payments, confirming the transformative capabilities of Stablecoins worldwide.