A block on stablecoin yield payments in the US will likely prompt other countries to step up and offer the option, according to Takatoshi Shibayama, Asia-Pacific lead at crypto wallet company Ledger.
Shibayama told Cointelegraph that if a wider ban on stablecoin yields is enacted in the US, it “definitely opens up a conversation” between institutions, stablecoin issuers and regulators overseas about how to respond.
He said countries such as Australia have given stablecoin issuers a regulatory carveout, but most stablecoins, even outside of the US, are “not providing yields or rewards to their user base just so that they can protect the banks’ interest.”
“If that were to change in the US, then I think it definitely opens up a lot of conversation between the stablecoin issuers and the regulators to allow yields or rewards to be passed through to their user base,” Shibayama said.
Takatoshi Shibayama, pictured in an interview in June, says it’s likely other countries could move on stablecoin yields if the US doesn’t. Source: YouTube
The US Senate is currently working on a bill to outline how market regulators will police crypto, but a banking lobby-supported provision to ban third-party platforms from offering stablecoin yields has stalled the legislation, as crypto lobbyists have resisted the ban.
Meanwhile, Shibayama said there’s been a shift in how Asia’s financial heavyweights have approached crypto.
Asia’s institutions focused on blockchain, not crypto
Shibayama said that since last year, “there has been a bit of a decoupling of crypto and the rest of blockchain technology” in Asia, and institutions are not really looking at products offering exposure to cryptocurrencies.
“They’re really looking at: Can they tokenize their financial products? Can they issue stablecoins?” he said. “There’s been lots of talks around that as opposed to offering DeFi and staking.”
“The institutions have carefully selected what they want out of this blockchain technology and then leaving crypto — the Bitcoins and Ethereums of the world — out of the conversation.”
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Shibayama said asset managers “are a little bit different” and are still looking at launching crypto products to increase the variety of what they can offer to clients, and are also drawn to doing so as there aren’t “strict regulations around them having to have a regulated custodian.”
“Obviously, they prefer to have regulated custodians,” he added. “They’re becoming a lot more selective on how they choose their custody provider.”
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Additional reporting by Stephen Katte.