"Stablecoins Emerge as Key Driver of Structural Change in Financial Markets"

On May 27, Eugene Investment & Securities released a report titled "Trump's Bitcoin Leading Room: Stablecoin Onboard Complete," analyzing that the financial market is expected to undergo structural changes as major banks and other traditional financial institutions participate in the cryptocurrency business due to regulatory easing by the Trump administration in the United States.

In January of this year, the U.S. Securities and Exchange Commission (SEC) withdrew the accounting rule (SAB 121) regarding custody of crypto assets, paving the way for financial institutions to provide cryptocurrency custody services without significant burden. The Office of the Comptroller of the Currency (OCC) and the Federal Reserve are also easing existing restrictions on the crypto asset industry. Such regulatory relaxation is facilitating the entry of major banks and institutional investors into the market and is creating an environment in which the cryptocurrency industry becomes more deeply integrated into the existing financial system.

In particular, stablecoins?designed to be pegged one-to-one to fiat currencies such as the U.S. dollar or the euro?are emerging as a key factor in the structural transformation of the financial markets. As of the first half of this year, the total issuance of stablecoins significantly exceeds $200 billion, with more than 95% being distributed in forms pegged to the U.S. dollar.

The U.S. Department of the Treasury has published a report analyzing the impact of the spread of stablecoins on the structure of bank deposits, demand for short-term Treasury bonds, and ultimately the hegemony of the U.S. dollar. According to the report, if appropriate regulations are established in the future, the stablecoin market could expand to approximately $2 trillion by around 2028. Furthermore, stablecoins are highly likely to bring about structural changes in the financial markets. For example, the emergence of interest-bearing stablecoins could become a direct competitor to bank deposits.

As a result, the U.S.-led changes in the cryptocurrency market environment, which other countries are following, are also affecting the price of Bitcoin. Cho Taena, an analyst at Eugene Investment & Securities, stated, "In the second half of this year, the price of Bitcoin is expected to maintain a positive trend, supported by a favorable policy environment and the inflow of institutional funds," and added, "Last year, the approval of spot Bitcoin ETFs in the U.S. improved market sentiment, and starting this year, with major banks entering the custody business and strengthening their derivatives segments, institutional investment is becoming more accessible, which is expected to lead to additional demand growth."