Stablecoins Set to Play Key Role in Future Economy, Says Citi
According to the prediction of global banking giant Citi, stablecoins will play an important role not only in cryptocurrency trading but also in the mainstream economy in the near future.
According to the latest report prepared by the Citi Institute’s “Future of Finance” think tank, with the improvement of the regulatory environment, stable value digital assets will begin to be used in many areas, from payment systems and international money transfers to banks’ short-term liquidity management.
Stablecoins are digital assets whose value is typically pegged to fiat currencies like the U.S. dollar. But according to Citi’s analysis, these assets are now moving beyond being just “tokenized cash” for crypto investors. Over the next five years, they could replace some domestic and foreign currency reserves, as well as become part of short-term liquidity portfolios held in banks. If yield-generating stablecoin types are developed, these assets are also expected to be used in term deposit accounts and individual money market funds.
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Ronit Ghose, Global Head of Future Finance at Citi Institute, made the following statement on the subject: “We are talking about the integration of stablecoins into the mainstream economy. For example, stablecoins can provide a cash counterpart to tokenized financial assets or can be used as a means of payment by SMEs and large companies. The dollar and, to a lesser extent, the euro have global reserve currency status. Stablecoins make it easy and low-cost for people around the world to hold dollars or euros.”
*This is not investment advice.