Solana

Arthur

Read

Arthur Hayes, former CEO of <a href="https://crypto.news/tag/bitmex/" rel="noopener noreferrer nofollow">Bitmex </a>and CIO of Maelstrom, predicted that major banks like JPMorgan will overshadow <a href="https://crypto.news/tag/tether/" rel="noopener noreferrer nofollow">Tether </a>and other stablecoin companies once they are permitted to issue fiat-backed stablecoins.
During an episode of Laura Shin’s Unchained podcast, Hayes outlined Tether’s successful business strategy, which involves taking dollars, investing them in treasury bills, and earning profits from the interest rate spread. This model has allowed Tether to achieve significant status in the crypto market, primarily due to the absence of a similar offering from the U.S. banking system.
<figure class="wp-block-embed is-type-video is-provider-youtube wp-block-embed-youtube wp-embed-aspect-16-9 wp-has-aspect-ratio">
 <div class="wp-block-embed__wrapper"><iframe title="Arthur Hayes on Why Bitcoin Is Money and ETH Is a Shitcoin He Loves - Ep. 587" width="1020" height="574" src="https://www.youtube.com/embed/eftdUDrA2gM?feature=oembed" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen></iframe>
 </div>
</figure>
He highlighted that Tether owners generate substantial free cash flow annually, estimating it to be around $4 or $5 billion.
However, Hayes emphasized that the current operational model of centralized stablecoins, which relies heavily on banking services for fund custody and clearing, is not sustainable.
You might also like: <a href="https://crypto.news/arthur-hayes-dumps-solana-for-ether-cites-divine-inspiration/" rel="noopener noreferrer nofollow"> Arthur Hayes dumps Solana for Ether, cites divine inspiration </a>
He expressed his <a href="https://crypto.news/arthur-hayes-slams-tradfi-double-standards/" rel="noopener noreferrer nofollow">criticism of bank managers</a> for providing these services to stablecoin firms like Tether but failing to capitalize on the opportunity to issue their stablecoins.
Hayes predicted a shift in the stablecoin landscape, suggesting that traditional banks, once permitted by the U.S. Treasury, could start issuing their fiat-backed stablecoins. He believes that banks such as JPMorgan could replicate the same interest-earning strategy currently employed by Tether, thereby cannibalizing the market share of existing stablecoin companies.
Hayes further argued that the legitimacy and backing of stablecoins issued by these banks would likely go unquestioned, giving them a competitive edge.
This prediction comes at a time when Tether, the company behind the USDT stablecoin, reported a market capitalization of <a href="https://crypto.news/tethers-marketcap-reaches-new-milestone-of-90b/" rel="noopener noreferrer nofollow">$91.5 billion</a> at the close of 2023, along with $4 billion in excess reserves. Tether has been actively investing in several expansion initiatives, as stated by its CEO, Paolo Arduino.
Read more: <a href="https://crypto.news/arthur-hayes-slams-tradfi-double-standards/" rel="noopener noreferrer nofollow"> Arthur Hayes slams TradFi double standards </a>

Arthur Hayes foresees banking giants overtaking Tether’s stablecoin dominance

crypto.news

Other articles published on Jan 1, 2024

Cross-chain protocol Orbit Bridge suffers exploit, losses surpass $80m

Bonk emerges as top crypto gainer in 2023 with staggering 7,302.9% gain

Experts Highlight AI’s Role in Guiding Financial Decisions in Next-Gen Banking

Global crypto ATM network shrunk more than 5,700 in 2023

Orbit Chain Lost $81M To A Major Hack Exploit On New Year Eve

Is Bitcoin’s mining industry collapsing?

Join our free newsletter for daily crypto updates!