Banks are facing a big drop in money made from foreign exchange and rates trading, while stablecoins are becoming more popular for cross-border transactions. Banks are expected to make the least amount of money from these activities since before the pandemic. Stablecoins had a value of $188 billion in November 2024, with Tether (USDT) and USD Coin (USDC) being the most common.
People used stablecoins for $425 billion in transactions each month in 2024, showing that more people are using them, not just for digital asset trading. Over 60% of people in emerging markets use stablecoins for currency substitution and 39% for cross-border payments. Matthew Sigel said that banks are expected to make the least money from foreign exchange and rates trading since before the pandemic due to tighter margins and better electronic trading.
He agrees with LondonCryptoClub that it’s important for banks to create a cryptocurrency trading desk to stay competitive. The decreasing revenues from traditional foreign exchange and the growing stablecoin market show that the financial world is changing. If banks want to stay competitive, they might need to include digital assets in their services.
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<p>The post Stablecoins Surge as Banks’ FX Trading Slumps: A Financial Shift first appeared on CoinBuzzFeed.</p>
