What happened: If you have read a couple of fintech newsletters lately, chances are you have read about stablecoins. My favourites were Matt Brown’s intro article to stablecoins, Simon Taylor’s piece on why Stablecoins are better but not necessarily cheaper, and perhaps this LinkedIn post highlighting a couple of providers in the space (incl. the startup of the post’s author).
My comment: There is not enough space in this newsletter to go through all these details, but if you ask me about the impact of stablecoins on fintech, I would paraphrase Simon Taylor and say, “It’s not the question of ‘if’ but rather ‘how’ and ‘when’”. Perhaps stablecoins will transform our industry; however, I would be careful when making statements like stablecoins will replace banking-as-a-service (I remember this piece). While there may be many things you want to improve in banking-as-a-service, not all of them can be achieved with technology alone. I would argue that stablecoins can improve fintech and, thus, banking-as-a-service, but that’s likely more of an evolution than a revolution. Especially when you remember that much of the friction in the banking-as-a-service industry is created by regulation, which will not necessarily be much better with stablecoins. So remember, when you compare stablecoins to banking-as-a-service, you often compare the reality of banking-as-a-service to an ideal scenario of stablecoins.
