Neo, a financial markets and payments processing banking technology company, surveyed 100 European payment research providers (PSPs) and the results cast a negative light on banks.
29% of PSPs are hesitant to work with crypto exchanges due to constraints imposed by banking partners.
However, the growing popularity of stablecoins as a means of international money transfer “could limit the opportunities for PSPs to participate in this growing sector, potentially impacting their ability to innovate.”
Research shows that PSPs are careful not to alienate their relationships with banks. As many as 95% of people have had their accounts restricted or closed by their bank.
The lack of openness is a big frustration. When asked why their account was canceled or restricted, 71% of users said they didn’t know.
Around 42% encountered restrictions or closures and received clarification from their bank. The total is over 100% because it happens so often in many banks.
Therefore, most PSPs have multiple banking relationships, with the average being less than three. 30% own 4-5 banks and 55% own 2-3 banks.
If you lose a partner, finding a new banking partner is an incredibly time-consuming process.
Only 2% of PSPs successfully open an account in less than 6 months. Most accounts take 7 to 18 months to open, with an average of 11.5 months.
The UK seems to have the widest range of times, including the shortest and longest.
So what are the most important banking issues related to the use of stablecoins?
New hire process takes time: Banks take time to hire employees specializing in cryptocurrencies and stablecoins. This may cause delays. Cryptocurrency markets, mismatch with stablecoins: Traditional banks are reluctant to integrate with volatile markets and often do not have the infrastructure to do so. Possible account closure: Regulatory changes or concerns may result in account closure. Outdated hardware: Banks rely on outdated technology systems that may not be able to keep up with the rapid pace of digital currencies like stablecoins. Assistance is limited if payments are prevented. Bank assistance may be limited if issues such as transaction delays occur. Statements regarding risk appetite lack clarity. : Banks have made vague statements about their commitment to stablecoins, making it difficult for businesses to rely on them. Limited USD settlement capacity: Banks can have difficulty settling stablecoin transactions into USD, especially during periods of high trading volume.
Just last week, Coinbase Global announced that it would delist all unauthorized stablecoins from EU crypto exchanges by the end of the year. Tokens like USDT, created by Tether Holdings, are likely to take a hit.
By the end of the year, the European Union will fully implement MiCA, a new regulation to regulate crypto businesses. Under the MiCA Regulation, which came into force on June 30, stablecoin issuers are now required to obtain e-money authorization in at least one member state.
Coinbase removes unapproved stablecoin listings due to EU’s MiCA rules
Stablecoins including USDT will be delisted by Coinbase once MiCA rules are fully effective by the end of the year
Nevertheless, the number of stablecoin transactions has recently seen a record surge. Stablecoin liquidity soared to an all-time high of $169 billion late last month, reflecting 31% growth since the beginning of the year.
Tether’s USDT maintained its leading position, with its market capitalization expanding by $28 billion to nearly $120 billion, accounting for 71% of the market.
Circle’s USDC also saw notable growth, with its market capitalization increasing by $11 billion to $36 billion, up 44% year-to-date and capturing 21% of market share.
Stablecoin Giant Tether Eyes Commodity Market
Tether, which operates the world’s largest stablecoin USDT, is making a bold move into the commodity market, signaling significant expansion beyond its traditional cryptocurrency-centric business.
Earlier this week, Tether revealed plans to explore financing opportunities in the commodity trading sector. The new venture comes on the heels of record profits for the company, which is expected to generate an impressive $5.2 billion in revenue in the first half of 2024 alone.
other places
FTX unstakes $28 million in SOL, but market remains calm…for now
178,631 SOL (totaling approximately $28 million) was de-staked from FTX wallets as part of the cryptocurrency exchange’s bankruptcy recovery plan
Grayscale’s multi-cryptocurrency fund explores conversion to ETF
While Bitcoin and Ethereum remain the primary assets for asset managers due to the availability of exchange-traded funds (ETFs), the company is ramping up efforts to expand its product offering to include multi-cryptocurrency ETFs.
Tesla transfers almost all of its Bitcoin, Elon Musk sparks speculation
Elon Musk’s Tesla transferred $760 million worth of Bitcoin to an unknown wallet.
Ripple launches RLUSD stablecoin with independent Reserve, Uphold, Bitstamp and Bullish
Ripple’s RLUSD stablecoin is supported by Uphold, Bistamp, MoonPay, Independent Reserve, and CoinMENA.
block cast
This week on Blockcast, we speak with Luca Prosperi, co-founder and CEO of M^0 Labs. His manly personality and gentle personality, which helped him build MakerDAO, belie the scars of health scares and nearly 20 years of struggle in traditional banking. Luca dissects the concept of currency creation and some of the foundations behind M^0’s quest to build the infrastructure for the cryptocurrency dollar.
Blockcast EP 43 | Luca Prosperi talks about the creation of the virtual currency dollar with M^0
Luca Prosperi, co-founder and CEO of M^0 Labs, joins Blockcast to discuss how the company is creating crypto dollars
event
GeckoCon (Bangkok, November 11, 2024)
GeckoCon is back. This year, we’re diving into the revolutionary world of Web3 gaming. See how the fusion of blockchain and traditional gaming is creating a whole new layer of entertainment. Don’t miss it. Visit CoinGecko today to secure your spot at the first-ever hybrid conference in Bangkok, Thailand. Or even from the comfort of your home!
Get your tickets now using Blockhead’s 40% code: BHGC24
(Limited to 30 redemptions, valid until October 31, 2024)
(Edited) (Bangkok, November 9-11, 2024)
(REDACTED) The conference will bring together some of the brightest minds in technology for a three-day game-changing event from November 9th to 11th, 2024 at Avani Riverside Hotel. The gathering was held just before Devcon and promises to be a pivotal moment for the convergence of artificial intelligence and Web3.
Interested readers can apply for free tickets here and sign up for the hackathon here.
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