A freeze on payments for stablecoin proceeds in the US will likely prompt other countries to step up and offer the option, said Takatoshi Shibayama, head of Asia Pacific at crypto wallet company Ledger.
Shibayama told Cointelegraph that if a broader ban on stablecoin proceeds is implemented in the US, it “certainly opens up a conversation” between institutions, stablecoin issuers and regulators abroad about how to respond.
He said countries like Australia have given stablecoin issuers an exemption from regulations, but most stablecoins, even outside the US, “don’t offer returns or rewards to their user base just so they can protect the banks’ interests.”
“If that were to change in the US, I think it would certainly open up a lot of conversations between stablecoin issuers and regulators to allow returns or rewards to be passed on to their user base,” Shibayama said.
Takatoshi Shibayama, photographed in an interview in June, says it is likely that other countries will increase interest rates on stablecoins if the US does not. Source: YouTube
The US Senate is currently working on a bill to outline how market regulators will police crypto, but a banking lobby-backed provision to ban third-party platforms from offering stablecoin yields has stalled legislation as crypto lobbyists have opposed the ban.
Meanwhile, Shibayama said there has been a shift in the way Asia’s financial heavyweights have approached crypto.
The Asian institutions focused on blockchain, not crypto
Shibayama said that since last year there has been “a bit of a disconnect between crypto and the rest of blockchain technology” in Asia, and that institutions are not really looking at products that offer exposure to cryptocurrencies.
“They’re really looking at: Can they tokenize their financial products? Can they issue stablecoins?” he said. “There have been a lot of conversations about this, as opposed to offering DeFi and staking.”
“The institutions have carefully selected what they want from this blockchain technology and are leaving crypto – the Bitcoins and Ethereums of the world – out of the conversation.”
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Shibayama said asset managers are “a little different” and are still launching crypto products to increase the variety of what they can offer to clients, and are also attracted to this because there is no “strict regulation around them that requires a regulated custodian.”
“It is clear that they prefer regulated custodians,” he added. “They’re becoming a lot more selective in how they choose their custody provider.”
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Additional reporting by Stephen Katte.