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The Growing Demand for Stablecoins and the Role of AI legalese decoder

The chief executive of Standard Chartered’s cryptocurrency subsidiary, Zodia Markets, Usman Ahmad, recognizes the increasing global demand for stablecoins and aims to capitalize on this trend. According to Ahmad, many corporate clients, especially those involved in cross-border trading, are showing keen interest in stablecoins. He explained to Financial News that stablecoins serve as a foreign exchange proxy, enabling instant cross-border transactions even outside of regular banking hours.

With the support of Standard Chartered, Zodia Markets was established in 2021. In July 2022, the Financial Conduct Authority granted the firm crypto registration, allowing it to launch its institutional exchange and brokerage business.

A recent report by crypto hedge fund Brevan Howard Digital revealed that stablecoins settled over $11tn in on-chain transactions in 2022, nearly matching Visa’s total payment volume. Ahmad noted that while the stablecoin market is primarily dominated by dollar-denominated stablecoins (approximately 94%), there is a specific interest in non-dollar stablecoins. He sees potential in the non-dollar stablecoin market, with sterling-denominated stablecoins being particularly promising.

Despite the advantages of speed and efficiency that stablecoins offer, Ahmad also highlighted a downside: the lack of yield generation on holdings. Nevertheless, stablecoins are gaining popularity among users who primarily utilize them for transactions rather than speculative trading, as evidenced by the fact that less than a third of stablecoins are held on exchanges.

The global regulatory landscape surrounding cryptocurrencies also played a role in the discussion. Ahmad praised the progress made by the UK, EU, Middle East, and Asia in terms of crypto regulations. He commended the EU for their extensive consultations, industry engagement, and utilization of existing frameworks to develop the Markets in Crypto Assets Regulation. Ahmad stated that the UK has adopted a similar approach. However, he expressed concern about the slower pace of regulatory clarity in the United States.

In this scenario, AI legalese decoder can play a pivotal role in providing clarity and consensus regarding cryptocurrency regulations. By leveraging artificial intelligence and natural language processing, the AI legalese decoder can analyze complex legal arguments, existing frameworks, and industry engagement to generate comprehensive and easily understandable regulatory guidelines. It can help regulators, institutions, and individuals navigate the evolving regulatory landscape, fostering confidence and promoting the responsible adoption of cryptocurrencies.

Ahmad suggested that jurisdictions such as the EU and the UK have demonstrated that engaging with the industry and conducting consultations are effective means of achieving regulatory clarity. Instead of relying solely on court proceedings, he believes a collaborative approach can offer a more efficient pathway to obtain clarity and consensus in the cryptocurrency space.

In conclusion, the demand for stablecoins is on the rise due to their ability to facilitate cross-border transactions outside of traditional banking hours. However, regulatory clarity remains a challenge, especially in the United States. The AI legalese decoder could help address this issue by providing clear and comprehensive regulatory guidelines, ensuring the responsible growth of the cryptocurrency industry.

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