Stablecoins are moving beyond crypto trading and into the heart of finance. If they go mainstream, what changes most for banks and what is still missing for mass adoption? Joining me today is Franz Bergmueller, CEO of Amina Bank. Franz, welcome to Capital Markets.
Thank you for having me.
You have said that stablecoins will simply transform banking. If stablecoins become widely used, what changes most fundamentally for banks?
It adds one operational system. That is the answer. There are many changes banks need to take on. First, stablecoins are crypto and crypto never sleeps — 24/7. So ask banks whether they can work outside banking hours. Amina Bank does this obviously, but it is a challenge in itself. In traditional payment systems there is a lot about operations — with correspondent banks when payments go cross-border, how difficult this sometimes is, all this conversation and manual effort. With stablecoins, that will be totally different because stablecoins are programmed money — fully automated. What is going to change is the operational effort will go down and banks need to build trust. Because as somebody said at an event I attended yesterday — the real currency of crypto is trust.
If the real currency of crypto is trust and we have removed a lot of the middle layers, what safeguards need to be in place?
For real mass adoption we need to follow all the banking rules. The big players will only come into this when there is proper regulation and proper rules — proper risk management, compliance, reserves that are backed and transparent and audited. Everything we know from banking. Otherwise stablecoins will always be a tiny little thing in crypto. If you check the data, stablecoins are only making up less than 1% of total payment volume globally. You can say it is tiny and irrelevant — or you can see the potential. It is huge.
Which of the things missing between today and mainstream adoption is the biggest roadblock?
From a bank’s perspective, a bank in the future needs to be able to offer both — traditional payment rails and stablecoins — seamlessly. Swift, for example, works very well within Europe. But transferring money outside of some regions is a big problem. From the stablecoin perspective, the whole market is very concentrated. US dollar denominated stablecoins are 96% of the market. Two players — Tether and Circle — make up 80% of that and keep all the margin for themselves. And this is the first time you put your money into something without getting any yield. That is an issue. So look at the technology — payments will change and blockchain technology will be at the centre. But stablecoin is just one form. What we will also see in the future are tokenised bank deposits in combination with a 24/7 payment system. Very interesting.
When traditional banks come into the space, what does that leave for a bank like Amina?
All the banks have made a decision — they are going to go into crypto. The very largest institutions try to build themselves. But the large number of mid-sized banks are speaking to us — this is so new to us, can you help us? Part of our business is our bank-to-bank service, where we offer white label services for those banks to offer crypto products in a very controlled and compliant way, without all the investments in technology and crypto expertise they would otherwise have to make. Crypto forensics using the blockchain to check source of wealth — only a few people can do this. They come to us. We are a specialist and they are happy to use that specialist.
Thank you so much.
