Banks must adapt to changing landscape or face extinction

Money Matters is a new periodic series from Currency News, with information drawn from DataVault, the new industry search engine that can filter and sort banknote (and coin) specifications by multiple fields in a matter of minutes, if not seconds. There are so many fields to choose from. What would you like to see covered next? Comment your suggestions and/or to try DataVault out for yourself! https://lnkd.in/eRVDGX6H

Is the current market downturn reminiscent of 2008? With market dips, calls for audits, and regional bank failures, some parallels are hard to ignore. One striking similarity is the explanation of 'bad loans' as the root cause. It raises a question: Have the lessons from past crises truly been learned? While attention is often directed towards emerging sectors like crypto, it's crucial to examine whether traditional financial systems are repeating old mistakes. #marketanalysis #economictrends #bankingindustry #financialcrisis #lessonslearned

Not long ago, stablecoins were seen as competition for banks. Today, they may be one of their biggest opportunities. 🏛️ Clear regulatory frameworks across major financial centers are creating safer conditions for adoption, defining who can issue stablecoins, how reserves must be held, and what oversight applies. 📘 Taurus summarizes it all in one report. Drawing on our work with 40+ financial institutions, we detail the regulations, the impact on bank operations, and the strategic opportunities ahead. 👉 Download the full report: https://lnkd.in/e7VnGAEV

Really interesting op-ed from Andrew Bailey, Bank of England Governer, in the FT on Stablecoins (https://lnkd.in/gjJw6fgm) highlighting 1) that "trust in stablecoins requires an insurance scheme" and 2) "widely used UK stablecoins should have access to accounts at the BoE". Following the collapse of Terra in 2022, I actually wrote an op-ed for OMFIF looking at the potential for a private-sector led insurance scheme that stablecoin issuers could opt-into. (https://lnkd.in/gnc468GZ?) As for allowing stablecoin issuers access to central bank accounts, this has been a much-discussed, and fascinating, topic for many years now. Back in 2021, I offered by own thoughts on this for those that are interested. (https://lnkd.in/giz7seSD)

Stablecoins will soon become integrated with the U.S. financial payment system. With the signing of the GENIUS Act, the U.S. Department of the Treasury and the NCUA are now crafting rules to define how credit unions, fintechs, and nonbanks can safely issue or use payment stablecoins. These developments could profoundly change how we think about digital payments, reserves, and financial inclusion. For credit union volunteers, leaders, and anyone curious about how stablecoins will fit into everyday payment systems, I posted an accessible introduction on my free Substack. It includes a curated list of resources for those who want to go deeper into this fast-changing space. ➡️ Read the full post here: https://lnkd.in/eaf4fHez 💬 Subscribe (free) to stay ahead as Treasury and NCUA move from policy to implementation on the GENIUS Act’s framework for stablecoins.

🚨 “A material flight from the banking system would not happen overnight,” said Jonathan Gould, head of the U.S. Office of the Office of the Comptroller of the Currency (OCC), downplaying fears of a stablecoin-driven bank run. Yet, the American Bankers Association and over 50 state banking groups are urging Congress to “close loopholes” in the GENIUS Act, as stablecoins have surged from $205B to $302B in market cap this year. Banks call it a risk to stability. Regulators call it manageable. But the truth is simple: 💡 Stablecoins are no longer a threat to the system — they’re becoming part of it. The real question isn’t if banks will adapt. It’s how long they can afford not to. (Source: Decrypt)

A truly fascinating historical perspective on Stablecoins is provided by Paul H. Kupiec (Senior Fellow and Arthur F. Burns Chair in Financial Policy at American Enterprise Institute, and former Chairman of the Research Task Force at the Basel Committee on Bank Supervision, and Director of the Center for Financial Research at the Federal Deposit Insurance Corporation (FDIC)) in the inaugural edition of the Journal of Financial Services. You can view this article and others, focused on the theme of Future of Payments, on the Journal website: https://lnkd.in/eN8Qnnrx #JournalofFinancialServices #ProjectiveInstitute

🎤 Nium Pulse @ Money20/20 🎤   We asked Payments and Commerce Market Intelligence's Lindsay Lehr Tutson her predictions for 2026 and what she thinks the biggest challenge in money movement is right now. 👇

With a bit of delay, I am pleased to announce the publication of our latest paper with George Pantelopoulos named "Central bank money as a catalyst for fungibility: the case of stablecoins" in the ECB working paper series! 🍾 Our paper argues that to ensure that means of payments are readily interchangeable at face value – i.e. fungible – for retail payments, three elements are required: (1) settlement finality; (2) interoperability; and (3) seamless convertibility of the means of payment into the “ultimate” or quasi-ultimate means of payment. Our paper argues that stablecoins issued by different issuers on different blockchains can be fungible to the same extent as commercial bank deposits from different banks provided that (i) payment and settlement technologies are interoperable, (ii) payments are transacted on ledgers that offer settlement finality, and (iii) that central bank money acts as the anchor to the monetary system (assuming that the central bank money is itself underscored by a homogenous unit of account). On this basis, this paper asserts that tokenised funds and off-chain collateralised stablecoins are fungible means of payments under some conditions, and that on-chain collateralised stablecoins can be prima facie classified as fungible means of payments, so long as the identical preconditions associated with accomplishing means of payment fungibility for tokenised funds/off-chain collateralised stablecoins can be fulfilled, and on the premise that the on-chain collateral can be readily converted into higher level money whereas algorithmic stablecoins are not fungible means of payments.

The passage of the GENIUS Act marks a turning point for financial institutions. Stablecoins and tokenized deposits are moving from emerging concepts to regulated financial tools. In our new white paper, we explore: • Market growth and use cases • Regulatory considerations • Key differences between stablecoins and tokenized deposits For bank leaders, understanding these digital assets is critical for shaping a long-term payments strategy. Read the full white paper: https://bit.ly/3VNDJYG