Cryptocurrencies are increasingly finding favor in the traditional finance realm, with stablecoins emerging as the darling of real-time collateral management. On May 14, industry experts gathered in Washington, DC, to discuss this burgeoning trend at the Consensus 2025 conference. The spotlight was on the transformative potential of digital assets to streamline processes that have long been encumbered by manual inefficiencies.
The Great Collateral Experiment
The conversation was dominated by insights from Joseph Spiro, product director at DTCC Digital Assets, who heralded stablecoins as the “perfect” fit for collateral management. During the panel—featuring voices from CoinDesk, Noble, and the National Credit Union Administration—Spiro emphasized, “Digital assets really are the perfect use case for collateral management, whether it be uncleared derivatives, clear derivatives, central counterparties, repo, or any other type of collateral.”
Spiro’s remarks come on the heels of a pilot initiative dubbed the “Great Collateral Experiment.” This project aims to demonstrate how stablecoins can modernize and simplify collateral management—a process traditionally plagued by cumbersome manual tasks and stringent collateral requirements. “All of that can be accomplished better, faster, more efficiently through digital assets and smart contracts,” Spiro explained, hinting at a future where manual processing is a relic of the past. This follows a pattern of institutional adoption, which we detailed in Visa and Baanx Launch USDC Stablecoin Payment Cards.
Legislative Moves and Market Implications
Coinciding with the conference, at least 60 crypto trailblazers convened in the capital to champion the Guiding and Establishing National Innovation for US Stablecoins, or GENIUS Act. This legislative effort, which initially stumbled on May 8 due to lackluster support from Democrats, aims to set clear collateralization guidelines for stablecoin issuers while enforcing compliance with Anti-Money Laundering laws. The bill’s progress—or lack thereof—raises questions about the regulatory future of stablecoins, especially with some lawmakers wary of potential financial gains by figures like former President Donald Trump through crypto ventures.
Adding another layer to the legislative landscape, the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act recently cleared the House Financial Services Committee. This bill, which garnered a 32-17 vote, now awaits its turn for debate and a floor vote in the House of Representatives. Its passage could further cement the role of stablecoins in the financial ecosystem, providing much-needed clarity and accountability.
Stablecoins: The Future of Lending and Settlement?
The integration of stablecoins into traditional finance systems appears not only promising but imminent. Kyle Hauptman, chairman of the National Credit Union Administration, highlighted the potential for stablecoins to transform lending and settlement processes during the same panel discussion. “It’s currently a clunky process where they settle at the end of the month,” Hauptman noted, suggesting that the programmability of stablecoins could render these processes more transparent and efficient.
“We not only made life easier for credit unions to settle these things up, you could do it for smaller amounts of money,” Hauptman elaborated, “but the borrower should get a better deal here because now this thing has some of the traits of a large bond issuance. It’s now liquid.” For a deeper dive into the market dynamics, see Ripple Offered $4B-$5B for Stablecoin Issuer Circle: Bloomberg.
Looking Forward: Opportunities and Uncertainties
Despite the optimism, the path ahead is not without hurdles. The regulatory landscape remains a tangled web, and questions linger about whether legislative efforts like the GENIUS and STABLE Acts can garner the bipartisan support needed for passage. Meanwhile, the market’s appetite for stablecoins continues to grow, suggesting a demand for innovative solutions that streamline traditional financial processes.
As stablecoins inch closer to mainstream acceptance, the potential for revolutionizing collateral management and beyond is tantalizing. Yet, as with any nascent technology, uncertainty looms. Will stablecoins live up to their billing as the panacea for financial inefficiencies? Only time—and perhaps a few more legislative battles—will tell.
Source
This article is based on: Stablecoins seen as ideal fit for real-time collateral management
Further Reading
Deepen your understanding with these related articles:
- Tether’s U.S.-Focused Stablecoin Could Launch Later This Year, CEO Paolo Ardoino Says
- U.S. Congress Braces for Intense Debate Over Crypto Legislation This Summer (openai)
- US crypto groups urge SEC for clarity on staking
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.
