Stablecoins Are Becoming Banking Infrastructure
The interesting question stopped being what a stablecoin is worth. It is which corridors settle on one, and what that does to the banks at each end.
Most of the public argument about stablecoins is still about whether they should exist. The operating question moved on some time ago.
I have worked with several well-known stablecoin issuers on entering the UAE market, and I advise Latitud Wallet, which moves remittances from the United States to Latin America settling in USDC. In both cases the use is the same, and it is not speculation. It is remittance: money that has to arrive, on a schedule, in an amount the person receiving it can rely on.
That is a payments problem. Once you treat it as one, every question that follows is a banking question.
Where does fiat enter and leave, and who provides that on each end. What happens on a weekend, or when one leg settles and the other does not. How is a transaction reconciled for an auditor who does not accept a block explorer as a record. Which correspondent relationships are exposed if a counterparty on the corridor turns out to be sanctioned. Who carries the loss when a recipient’s funds are frozen for reasons neither party can see.
None of those are new questions. They are what correspondent banking has always had to answer. The instrument changed and the obligations did not move at all.
What this means for a bank
An institution that treats stablecoin flow as a crypto exposure will price it as one, and will keep pricing it that way until the flow is large enough to have become somebody else’s business.
Corridors are the thing to watch, not tokens. When a stablecoin becomes the settlement layer for a real remittance route, it stops being a product a bank can decline and becomes infrastructure the bank needs a position on. The decision is no longer whether to support digital assets. It is whether to be present in a payment corridor that now clears this way.
The businesses that do well here will not be the ones with the best token. They will be the ones that can satisfy a compliance officer at both ends of a corridor. That is unglamorous, it is slow to build, and it is much harder to copy than the technology.