Banks are set to profit from demand for stablecoin deposits as the market grows exponentially, according to a report by Morgan Stanley’s top cryptocurrency strategist Shina Sho, cited by CoinDesk.
The report notes the market for stablecoins has grown from $20 billion at the start of the year to $137.7 billion currently.
Stablecoins can offer yields of more than 5% per year on crypto deposits and provide access to DeFi-sector. Sho believes regulators and governments will inevitably respond.
According to the strategist, cryptocurrencies trade on par with risky assets thanks to active use of leverage, as well as fiscal and monetary stimulus.
She also noted growing institutional interest in digital assets. Altcoins are pulling market share away from Bitcoin due to lower USD prices and a range of use cases, Sho added. She said the ‘battle of blockchains’ is likely to continue.
As institutional interest in cryptocurrencies has grown, there is a rising risk that Bitcoin becomes more concentrated in the hands of a small group of investors, the expert added.
In September, Morgan Stanley created a cryptocurrency-analytics unit, elevating Shina Sho to the role of chief cryptocurrency strategist. Previously, she had served as the head of currency-market strategy.
In October, the investment bank advised its advisers to refrain from recommending Bitcoin ETFs to clients. Earlier, its chief James Gorman said there was only modest client interest in digital assets.
Subscribe to ForkLog’s channel on YouTube!