NH Investment & Securities: "Stablecoin Bill Passed... Issuance Competition to Intensify"

NH Investment & Securities analyzed on July 18 that the passage of the U.S. stablecoin bill will trigger a competitive race among companies to issue stablecoins.

On July 17 (local time), the U.S. House of Representatives held a plenary session and passed the "Genius Act." The bill aims to establish a regulatory framework necessary to promote the use of stablecoins by defining the legal status of stablecoins, specifying issuance procedures, and setting disclosure obligations.

NH Investment & Securities expects that the passage of this bill will ignite competition between financial and non-financial companies to issue stablecoins.

Hong Sungwook, a researcher at NH Investment & Securities, stated, "Major U.S. banks, other financial institutions, and non-financial companies are expected to issue stablecoins and compete with Circle (CRCL) to secure market share. While the Genius Act prohibits stablecoin issuers from paying interest to stablecoin holders, competition is likely to intensify through promotions that are not in the form of interest."

He added, "In the long term, as the proportion of payments made with stablecoins increases, payment companies such as Visa and Mastercard may face pressure on their performance. For banks, the demand for deposits may decrease over time due to stablecoins, so they are expected to respond by launching their own stablecoins and deposit tokens."

New services are also expected to come into the spotlight. He said, "The Genius Act prohibits stablecoin issuers from paying interest to stablecoin holders. As a result, DeFi (Decentralized Finance) services that allow users to earn interest with their stablecoins may attract attention."