The Stablecoin Race Could Make Bank Loans More Expensive

Stablecoins could make borrowing more expensive. That was the warning from Bank for International Settlements chief Pablo Hernández de Cos on August 28, as banks expand into digital money.

These digital assets are becoming an awkward asset class for banks. Because it's almost killing their business model and forcing them to introduce new products.

The stablecoin market now holds roughly $304 billion, including about $183 billion in Tether and $74 billion in USDC. Federal Reserve researchers describe these tokens as potential competitors to traditional transaction accounts.

Arthur Firstov, Chief Business Officer at Mercuryo, told BeInCrypto why that matters.

"Stablecoins stopped being a crypto product and became a payments product. For years banks could wave it off as 'crypto infrastructure' – that's a much harder line to hold when stablecoins are being used for payments, treasury, cross-border settlement, cards, merchant payouts, and institutional settlement. At that point they're competing directly with one of the most valuable products a bank has: the transaction account."

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