20th November 2024 Digital Bytes

The impact of stablecoins on banks' balance sheets in the EU - stablecoins, which are tied to stable assets such as fiat currencies, are transforming the financial landscape by providing quicker and more affordable payment options whilst minimising volatility. Stablecoins present challenges to conventional liquidity management and regulatory capital standards, especially when compared to CBDCs and traditional banking frameworks. European banks are required to hold additional capital for deposits placed at the central bank - which impacts a banks’ balance sheets in a way that is not the case in other jurisdictions. This could result in EU bank-issued stablecoins’ collateral being riskier, i.e. not as stable.

Blockchain as a service (BaaS) - blockchain as a service (BaaS) simplifies blockchain deployment for businesses by providing infrastructure and management tools, allowing companies to build and manage blockchain networks without complex in-house systems. Major providers such as Micr…