Stablecoins, Crypto Dominate Digital Assets Thoughts Of The Week

“Twenty-one banks backing a stablecoin is the clearest sign yet that the growth in blockchain rails is coming from TradFi now, not crypto. Nobody’s debating whether public chains work for settlement anymore, just who gets to own the issuer.

“The real losers here are the incumbents: between Open USD in June and the banks today, Circle’s dropped 6% because the market gets that banks and card networks own the customers, and Circle just owns a token.

“My guess is the market splits three ways — Tether keeps emerging markets and offshore retail, Open USD takes internet commerce, and the bank coin becomes the institutional settlement asset sitting next to DTCC’s tokenization launch in October. The catch is speed: this started as 10 banks ‘exploring’ last October and still has no company or product, so by mid-2027 they’ll be third to market in dollars, which is why the euro token might actually be the more interesting part.”

– Alex Witt, founding general partner, Verda Ventures

“Banks spent years debating whether stablecoins were a threat to traditional finance. Now 21 major financial institutions are getting together to issue one. To me, that is the bigger story here.

“I’ve maintained for some time that stablecoins will have a direct impact on the traditional banking system. Banks ultimately have two choices: adapt to where the movement and transaction of money is going, or risk being disrupted by it. This consortium is a clear sign that some of the world’s largest financial institutions recognize that shift and intend to participate in it rather than watch it happen from the sidelines.