CHARLOTTE–Bank of America Merrill Lynch is forecasting the disruptive effects of stablecoins on traditional bank deposits and payment systems will become evident within the next two to three years.
According to the banking giant it anticipates a moderate growth in the stablecoin market, ranging from $250 million-$750 million in the coming year, Ainvest.com reported.
“Despite the active preparations by major U.S. banks, there remains skepticism regarding the practical use cases of stablecoins within the domestic payment landscape,” the analysis stated. “The consensus among industry experts is that cross-border payments present the most viable application scenario for stablecoins at present.”
Providing a boost to stablecoins was the president’s signature on several pieces of legislation that will create a regulatory framework for crypto currency, including the GENIUS Act and the CLARITY Act.
‘Clear & Disruptive’
According to a recent research report by Merrill Lynch, with the legislation signed, stablecoins are “poised to exert a clear and disruptive influence on the deposit bases and payment infrastructures of traditional banks within the next two to three years,” Ainvest reported.
The BofA report stresses that significant changes will manifest in the medium term, and banks will soon begin to feel the competitive pressures from digital currencies.
The report noted that some of the other big banks, including JPMorgan Chase and Citi, have questioned the necessity of stablecoins given the convenience of existing payment systems and the practical cost barriers related to conversions between stablecoins and fiat currencies.
