Key Highlights
- In his speech, Federal Reserve Governor Christopher Waller stated that stablecoin could increase competition in the world of digital payments
- He highlighted stablecoin’s nature to enhance the payment system by making financial settlement faster and cheaper
- After the approval of the GENIUS Act, many payment giants and banking institutions are rushing to integrate stablecoins
During the panel discussion on central banking and the future of payments, Federal Reserve Governor Christopher Waller referred to stablecoin as a “fascinating new payment instrument,” which is expected to introduce competition in the payments sector.
With his statement, he directly highlighted the ongoing trend among the major financial institutions and payments giants who are rushing to integrate stablecoin innovations into their existing financial infrastructure. He stated that this digital currency is pegged to the U.S. dollar, which bolsters its competition within the payment system in a healthy manner.
Federal Reserve Governor Christopher Waller Highlights Stablecoin Perks
This is not the first time that Federal Reserve Governor Christopher Waller has shared his views on stablecoin. In July, he shared a similar statement where he highlighted the growing importance of stablecoin in the digital payment system. At present, the stablecoin market holds $313.58 in market capitalization, according to CoinMarketCap.
According to him, these digital currencies will make digital payments cheaper and faster. He said, “And that’s the goal for me, as a free-market capitalist economist, is that I want competition in payments to drive down the cost for households and consumers, and businesses. That’s it.”
“If stablecoins present a lower-cost alternative to consumers and businesses, I am all for it. We are already seeing this dynamic develop outside of the United States, where U.S. dollar stablecoins are an attractive option in countries in which access to dollar banking services is expensive or limited,” he said.
Waller has been a big vocal advocate of stablecoin for years. He explains that stablecoins can introduce greater efficiency, speed, and choice into financial transactions. This is similar to how private banks compete with each other today.
In his view, stablecoins work as synthetic dollars that work in the same way as traditional bank money but operate on blockchain technology. This technological foundation can facilitate international payments and reduce fees, particularly in regions with outdated financial infrastructure.
Global Adoption of Stablecoins Increases
Many countries around the world are rapidly integrating stablecoins alongside their financial systems. In Latin America, Argentina is a prime example of this trend. Amid the catastrophic financial crisis in the country, more than 60% of crypto users in the country have converted their cash into stablecoins like USDT to preserve their savings. This strategy helps these crypto investors to use it as a hedge against currency devaluation.
Similarly, Brazil’s central bank has also officially classified stablecoins as assets and is developing regulations to incorporate them easily into its traditional financial system. The main purpose of this development is to use this innovation especially for remittances, which are an important source of income for many families.
Financial Institutions and Payment Giants Embrace Stablecoins
Major banks and payments giants are also rushing to incorporate stablecoins to enhance the global payment system. One of the biggest payment applications, PayPal, has announced the launch of its own USD-pegged stablecoin, PYUSD. By 2025, it was used for its first major corporate payout to test its practical utility.
Users on platforms like Venmo and Cash App can now hold and send PYUSD, which allows these payments to link directly to everyday spending. This integration majorly reduces fees and speeds up transfers, particularly for cross-border payments.
The leading payment network, Visa, is also developing a platform that allows banks to issue their own stablecoins and settle transactions on blockchains like Ethereum and Solana. Its pilot programs have shown that cross-border fees can be reduced by up to a major percentage.
In the banking sector, JPMorgan’s platform, Kinexys, uses stablecoins to offer clients round-the-clock tokenized payment services. This reduces the risks and time associated with foreign exchange settlements. BNY Mellon is also expanding its role by providing custody services, holding the reserve assets that back stablecoins.
Bank of America and other major banks are also planning to launch their own stablecoins after the approval of the GENIUS Act, the first legislation for the stablecoin market.
Source: https://www.cryptonewsz.com/stablecoins-payment-competition-fed-governor/
