The confrontation long expected between crypto and traditional banking systems has officially started with the adoption of the engineering law. The impact of the legislation is already obvious – in two weeks, retail giants like Amazon and Walmart plan to launch their own stablecoins.
The CEO of Kronos Research, Hank Huang, told Beincrypto that if more companies adopt this trend, banking systems will have to adapt quickly, especially since money is moving away from traditional deposits. However, consumers who go to stables supported to retail will not have the same protections as conventional banks offer.
A new era for the integration of cryptography
The law on engineering represents a historical change in the way in which cryptocurrency, in particular stablecoins, is integrated into the American financial markets. It guarantees that stablecoins are supported by real assets and subject to solid surveillance while recognizing their potential to innovate payments.
Among the most important provisions of the bill is a clear stipulation which only assured deposit institutions, including banks and credit cooperatives, and certain approved non -banking entities will be authorized to issue. It also strictly prohibits algorithmic or non -relieving stable stables to ensure consumer stability and confidence.
Since the legislation was adopted, several high -level retailers have expressed their interest in the launch of the Stablecoins company. The reports will circulate that business giants like Amazon and Walmart seriously envisage this step.
Several motivations probably lead to their reasoning.
Motivations of retail giants for stablecoins
Retailers like Amazon and Walmart have a huge clientele, generating billions of daily income from purchases alone. Many customers pay using traditional credit card networks such as Visa and Mastercard.
Although these networks generally charge exchange costs of 2 to 3% per transaction, for companies with massive transactions volumes, these costs can accumulate billions of dollars per year.
Electric companies can bypass these networks by issuing their own stablecoin, reducing or considerably eliminating these costs.
At the same time, the abolition of intermediaries of the payment network, such as banks, would considerably accelerate settlement times. Since stablecoins are built on blockchain technology, they can facilitate almost instant establishments, leading to cash flows and much better efficiency for businesses and their suppliers.
In the context of international transactions, the stablecoins supported at retail would offer rationalized global payments, offering a less expensive alternative to traditional cross -border payment methods, which often involve exchange fees. Such a decision would also intrinsically expanded retailers’ customers.
A Stablecoin Owner could also be integrated into loyalty and reward programs, offering customers unique incentives or discounts. It could also open doors to new financial services offers.
“The rewards without friction and the advantages and advantages focused on the consumer will feed a quarter of work. With favorite advantages and practical utility, the stablecoins fly the spotlight, they will drive out the yield on inactive deposits, “Huang told Beincryptto.
These numerous advantages arouse questions about how this new payment traffic could have an impact on traditional banking services.
Stablecoin disruptive impact on traditional banking
The widespread adoption of stablecoins supported by retailers could considerably disrupt traditional banking services, mainly by diverting money far from conventional deposits.
If Amazon or Walmart emits a stablecoin, consumers could choose to keep their purchasing power in these stablescoins rather than in traditional bank accounts. Instead of keeping money in a current account to pay for grocery store or online purchases, a consumer can transfer these funds to an Amazon or Walmart Stablecoin portfolio.
This change would directly reduce the money held in the form of deposits in traditional banks. Since these deposits are the cornerstone of the bank, an important exit would shrink its funding base. In turn, this would affect their ability to lend money to existing customers and companies.
“Consumers will go from tradfi to channels in search of familiar, fast and flexible rails.
In short, their global economic activity would decrease considerably.
“The Genius Acts Nivelle the rules of the game with strict standards on the reserves, the regulations and the eligibility of the issuers. Banks gain ground with trusted executives, while non -banking participants are faced with close rules. In the end, it is a liquidity battle where the strongest survives,” added Huang.
Conscious of these dangers, how will traditional banks adapt their strategies to remain competitive?
How can banks adapt to digital change?
To a certain extent, banks have experienced a generalized displacement for some time now. Stablecoins could accelerate this trend more. Traditional banks are already actively striving to meet the growing demand for digital banking in recent years.
A recent report by Cornerstone Advisors highlights a significant increase in Fintech expenses in all generations. From 2021 to 2024, fintech spending among generation Z, generation Y, generation X and baby boomers have collectively jumped 86%, from $ 13.29 billion to 24.69 billion dollars.
Some banks have already made significant progress to prepare for the generalized adoption of stables -coated to retail. Jpmorgan Chase, for example, has been preparing for this change for years.
“Banks like JPMorgan are not content to defend the deposits, they will exploit the trusted infrastructure to create fast and secure digital dollars that unlock new income and will deepen the advantages of customers,” said Huang.
From the launch of JPM Coin in 2019, JPMorgan launched the concept of a digital currency emitted by banks for wholesale payments, taking advantage of private blockchain technology within their Kinexys unit to improve efficiency and accelerate interban establishments.
After the adoption of the law on engineering, he now announced his last strategic step: the introduction of the JPMorgan (JPMD) deposit token, which will be piloted on the Coinbase Public Basebchain.
This decision is particularly important because JPMD is positioned as a fully guaranteed digital representation and in particular likely to interest banking deposits.
This contrasts directly with the prohibition of the Act on Acts for Non Banking Payment Stables to pay interest to holders, according to a provision, criticisms are a concession to outgoing banks.
JPMD’s ability to offer yield alignments on the new regulatory clarity. It offers institutional customers an alternative that is compliant and highly integrated into traditional stables for chain establishments and cross -border B2B transfers.
It also clearly shows how a bank can use its existing forces to maintain its strategic advantage against this new competition.
The critical role of FDIC insurance
Due to their existing unique infrastructure, resources and regulatory protection, banks have a solid base to adapt to changes in the financial sector.
“Tradfi banks must build bridges between heritage and digital – the deposit of deposit tokens, the increase in the advantages supported by blockchain and the observation of safety with transparent convenience. To lock liquidity, banks must mix innovation with insurance,” Huang told Beincryptto.
This possibility is particularly critical given the disparities in consumer protection between traditional banks and stabbing issuers who are not banks. Traditional banks offer federal protection on deputy insurance (FDIC), which provides deposits up to $ 250,000 per depositor. This insurance, supported by the American government, is the strongest guarantee available in the financial world.
FDIC insurance does not apply to stablecoin issuers outside the banking sector. Although the engineering law aims to guarantee reserves and robust audits for the floors, a “execution” on a transmitter could still cause operational problems, liquidity problems or even stablecoin losing its ankle at $ 1. In such cases, the recovery is based on the solvency and operational integrity of the transmitter.
On the other hand, if a bank provided by the FDIC fails, the guaranteed deposits remain safe. The FDIC intervenes to ensure that directors are not lost, which is the main objective of Deposit insurance: protecting consumers against banks’ failures.
“Without insurance insurance, consumers are faced with safety risks and a shift in liquidity, with unclear transparency on actual reserves. During large acquisitions, Stablecoins can find it difficult to remain stable under pressure,” added Huang.
By taking advantage of this significant advantage, banks can maintain a strong call to consumers who prioritize guaranteed deposits.
The future of finance: a hybrid system
The emergence of stablecoins, in particular those of large retailers or non -banking entities, marks a significant change in the financial industry. This development could influence the future of the traditional banking model and modify conventional capital flows.
Each player has unique advantages, which makes the panorama all the more competitive. Although the result is probably a hybrid financial system, non -banking and banking entities will have to gain their place or bleed slowly.
Ultimate winners will best combine technological innovation with trust, security and regulatory compliance.
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