Stablecoins are solution to crypto’s banking problem, exec says
The collapses of banks like Silvergate have certainly impacted cryptocurrency exchanges but there are ways for the industry to survive without the support of banks, one executive believes.
Crypto exchanges significantly rely on traditional banking systems for customer deposits, which makes them vulnerable to various banking issues, according to Bitstamp USA CEO and global commercial officer Bobby Zagotta.
The executive believes that stablecoins — cryptocurrencies whose value is tied to fiat currencies or other assets — could be a solution to crypto’s banking problem.
“We are currently discussing how stablecoins can offer us an alternative to traditional banking,” Zagotta said in an interview with Cointelegraph on March 27. He added that stablecoins could potentially unlock new capabilities for the industry, allowing it to look at banking from a new perspective and to go back to the genesis and purpose of crypto, adding:
According to Zagotta, stablecoins provide many benefits like faster and more cost-effective transactions, reduced reliance on banks and increased liquidity. “Depending on regulations it's possible we will see a continued evolution and integration of stablecoins within exchanges amid the banking crisis,” the exec stated.
In the interview, Zagotta emphasized that the crypto industry needs to figure out the factors that led regulators to step in at Signature bank. That is necessary for the industry to ensure that crypto-friendly banks are operating in a safe and sustainable manner moving forward. He also cautioned exchanges against creating more risk for customers by hastily moving customer funds around different U.S. banks that may be stressed or at risk.
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