September 27, 2024
By Our Correspondent
Stablecoins are poised to facilitate institutional adoption in Asia, despite potential regulatory discontent, according to Michael Gronager, co-founder and CEO of Chainalysis, during an interview at Token2049 in Singapore.
Although the region has seen a surge in cryptocurrency users, the United States remains the most significant market in the industry.
Stablecoins, which are digital tokens tied to real-world assets such as the U.S. dollar or gold, serve as a foundation for cryptocurrency trading. Their stable value allows them to function effectively as both a store of value and a medium of exchange.
Gronager noted, “One of the most significant trends in the current crypto landscape, and arguably its most impactful application, is the seemingly simple stablecoin.” He highlighted that stablecoins account for two-thirds of all transaction volume on blockchains.
Chainalysis, a blockchain analytics firm, frequently publishes reports on the global state of cryptocurrency and its adoption. The latest report identified five Asian nations among the top ten in the Global Adoption Index. India and Nigeria have maintained the top two spots for grassroots crypto adoption for two consecutive years, while Indonesia has emerged as the fastest-growing, now ranked third.
Gronager mentioned that last year, one or two banks in Japan expressed intentions to launch a U.S. dollar-backed stablecoin within a year, but this has yet to materialize. “In recent discussions in Japan, we now have ten banks interested in launching such stablecoins,” he stated.
He explained that the delay is primarily due to the slow pace of banks, which often engage in discussions with regulators.
Regulatory bodies certainly harbor “some level of concern,” and numerous issues will need to be addressed, he added. Meanwhile, banks are increasingly facing competition from stablecoins in the remittance sector, according to Gronager.
