In a pivotal discussion at Consensus 2025 in Toronto, PayPal’s SVP of digital currencies, Jose Fernandez da Ponte, made a compelling case for the involvement of traditional banks in the burgeoning stablecoin market. His remarks come at a critical juncture as the United States inches toward enacting stablecoin legislation—a move that could reshape the landscape of digital assets and potentially entice banks to enter the fray. For more on the legislative progress, see U.S. Senate Moves Toward Action on Stablecoin Bill.
Banks, Stability, and Scaling
“It might sound counterintuitive, but you do want the banks in this space,” Fernandez da Ponte declared. His stance hinges on the belief that banks’ robust infrastructure, from custody solutions to fiat on-ramps, is crucial for stablecoins to flourish beyond their current crypto-native enclaves. “You want that connectivity and that fabric to work,” he emphasized, underscoring the potential synergy between traditional financial institutions and digital currencies.
This perspective aligns with broader efforts to bring regulatory clarity to the digital asset sphere. As lawmakers in the U.S. make strides toward passing stablecoin legislation, the potential entry of banks could signify a monumental shift. Anthony Soohoo, CEO of MoneyGram, echoed this sentiment, noting, “There’s always hesitation: Can I trust this? [The stablecoin legislation] is going to answer a lot of those questions.”
Market Dynamics and Regulatory Anticipations
The anticipation of regulatory clarity has already sparked discussions about market dynamics. Both Fernandez da Ponte and Soohoo foresee a wave of new issuers entering the stablecoin market, followed by an inevitable period of consolidation. As Fernandez da Ponte put it, “It’s not going to be 300 stablecoins, and it’s not going to be just two.”
The current market is dominated by heavyweights like Tether’s USDT and Circle’s USDC, which together account for nearly 90% of the $230 billion stablecoin market. PayPal’s own PYUSD, launched in 2023, remains a smaller player, with a supply of $900 million. However, Fernandez da Ponte challenges the notion that market cap is the sole indicator of success, instead highlighting metrics like transaction velocity, active wallets, and the number of transactions as key indicators of genuine usage. This follows the recent development where the SEC Ditches PayPal’s PYUSD Probe, Removing Key Regulatory Hurdle for Its Stablecoin.
Real-World Applications and Future Trajectories
In regions plagued by high inflation and volatile currencies, dollar-backed stablecoins are increasingly seen as reliable stores of value and efficient tools for cross-border payments. Soohoo pointed out MoneyGram’s role in facilitating access to these digital assets, especially in emerging markets. “We see ourselves between physical finance and digital finance,” he remarked, illustrating the company’s unique position in bridging these worlds.
The narrative is somewhat different in developed countries, where stablecoin adoption has been slower. Yet, with impending regulatory frameworks, stablecoins hold the promise to streamline corporate treasury functions and cross-border disbursements. Fernandez da Ponte shared a glimpse into this future: “We used to have this mad rush on Friday to make sure money was in the right places before the weekend. Now we’re sending money to the Philippines and Africa in ten minutes with stablecoins.”
Ultimately, the trajectory of stablecoins hinges on real-world use cases rather than speculative hype. “Consumers don’t care about stablecoins. They care about solving problems,” Fernandez da Ponte asserted. As the industry stands at the midpoint of what he describes as a “ten-year journey,” the role of regulation will be critical in defining the path forward.
Whether stablecoins will achieve the trillion-dollar scale projected in the coming years remains to be seen. Yet, the convergence of banking infrastructure and digital innovation might just be the catalyst needed to unlock their full potential. As the world watches, the crypto landscape could be on the brink of a transformative era.
Source
This article is based on: PayPal Crypto Head Says Banks Are Needed to Unlock Full Stablecoin Potential
Further Reading
Deepen your understanding with these related articles:
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- Tether’s U.S.-Focused Stablecoin Could Launch Later This Year, CEO Paolo Ardoino Says
- Ripple Offered $4B-$5B for Stablecoin Issuer Circle: Bloomberg
Steve Gregory is a lawyer in the United States who specializes in licensing for cryptocurrency companies and products. Steve began his career as an attorney in 2015 but made the switch to working in cryptocurrency full time shortly after joining the original team at Gemini Trust Company, an early cryptocurrency exchange based in New York City. Steve then joined CEX.io and was able to launch their regulated US-based cryptocurrency. Steve then went on to become the CEO at currency.com when he ran for four years and was able to lead currency.com to being fully acquired in 2025.
