Ripple to Central Banks: Integrate Stablecoins or Fall Behind
Ripple is calling on central banks to implement regulated stablecoins because the 300 billion market takes the shape of Visa, transforming world payments.
Stablecoins are no longer an experiment. The market is over $300 billion and the amount of transactions per year is greater than that of Visa and Mastercard.
Ripple policy director Matthew Osborne cautioned central banks not to be afraid of stablecoins but embrace them. On X, Ripple wrote: The answer is to have central banks shepherd the momentum of the stablecoins, rather than combat it.
Source: Ripple
Major Institutions Reverse Their Position
The ECB has recently noted the advantages of stablecoins in cross-border payments. Several types of money are going to co-exist in the next financial ecosystem. The Bank of England proposed in a multi-money system that stablecoins have the potential to facilitate faster and cheaper payments.
US Stablecoins have been regulated by the US Genius Act, giving banks the ability to issue them directly. The analysis of OMFIF provided by Osborne identifies the main benefits: immediate international transfers, work in dozens of blockchain networks, and accelerated innovation.
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Why Safety Net Integration Matters
Central-bank money has a geographical restriction on cross-border operations. The adoption of on-chain is not yet global. Atomic settlement technology does not impose any such limitations on stablecoins.
The danger of disintermediation seems exaggerated. Money-market funds already have similar features without disrupting banking systems. Stablecoins are unlikely to replace traditional deposits, but rather serve as a complement. Large banks might also become significant issuers themselves.
Regulation is not enough. In 2023, the collapse of Silicon Valley Bank momentarily caused USDC to lose its peg. Central banks are advised to open the door to well-regulated stablecoins to deposit support assets in their accounts, extend liquidity guarantees, and allow direct access to payment systems.
Ripple underlined this integration approach in the OMFIF article by Osborne on X. Prudential oversight gives central banks the opportunity to shape development. Otherwise, they may find themselves bystanders as markets develop beyond regulatory control.
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