Financial institution StanChart streamlines U.S. T+1 stock trading for investors from the Asia Pacific region with its innovative stablecoin FX solution.
In a recent report, Standard Chartered and Zodia Markets, a crypto brokerage and exchange founded by Standard Chartered's SC Ventures, have proposed the use of stablecoins as a solution to foreign exchange challenges raised by the US move to T+1 for equity settlement.
Zodia Markets, which was launched in an unknown year, initially operated as a crypto brokerage and exchange but later pivoted to focus on stablecoins for cross-border payments. By the middle of this year, the platform was trading $50-$60 million a day.
The report, however, does not specify a date for the expected growth of stablecoin transaction volumes. It does predict that this growth will be significant, with stablecoin transaction volumes reaching 10% of US M2 transactions and 10% of foreign exchange transactions.
The U.S. Securities and Exchange Commission (SEC) is identified as the driving force behind this growth. The SEC's regulatory framework for stablecoins is expected to provide a clear and stable environment, attracting more traditional finance investors to adopt stablecoins.
Zodia Markets is currently trialing the use of stablecoins for cross-border payments. The platform's over-the-counter (OTC) FX settlement solution aims to streamline the process, making it more efficient and cost-effective.
This shift towards stablecoins could be a game-changer for non-US traditional finance investors. By using stablecoins, they can bypass the foreign exchange challenges posed by the US move to T+1 for equity settlement, facilitating faster and smoother transactions.
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As the use of stablecoins continues to grow, it's clear that they are set to play a significant role in the future of cross-border payments. With the right regulatory framework in place, the potential for stablecoins to revolutionise the financial industry is immense.
