StanChart crypto CEO is bullish on non-USD stablecoin market

Zodia Markets’ CEO, Usman Ahmad, aims to capitalize on the growing worldwide interest in stablecoins, crypto assets anchored to stable assets such as fiat money.

Ahmad recently discussed the opportunities in the stablecoin sector and revealed that many corporate clients are showing keen interest.

“Mostly firms which are trading in multiple jurisdictions,” he said in a Financial News interview published Tuesday.

Ahmad noted that stablecoins act as a sort of stand-in for foreign currency, enabling people to make instant international transactions even when banks are closed.

Zodia Markets serves as a digital asset exchange and brokerage, specifically catering to institutional clients. It operates separately from Zodia Custody, a digital asset custodian service. Both entities are backed by Standard Chartered.

Ahmad observed that the stablecoin market is gaining momentum, especially in those not pegged to the US dollar. He added that about 94% of the stablecoin market is denominated in dollars.

Popular stablecoins, such as Tether (USDT) and USD Coin (USDC), are all linked to the US dollar’s value, putting them among the largest crypto assets by market cap.

“We feel there is an opportunity in the non-dollar stablecoin market,” Ahmad said, highlighting British sterling-denominated stablecoins as a strong prospect.

He mentioned that some global clients have expressed frustration over banking hours affecting crypto transactions, as they have to wait for banks to reopen after weekends.

“With stablecoins, they could do that within minutes on bank holidays,” he added.

Traders and investors might look for options other than the US dollar to reduce risk, while international companies could find stablecoins pegged to currencies that better align with their global operations to be valuable.

Ahmad recognized that although stablecoins may be speedy and efficient, they don’t offer yield generation as a benefit.

For yield, stablecoin holders generally have to seek out opportunities in DeFi, potentially taking on additional risks.

Updated Sep. 5, 2023 at 9:50 am ET, clarifying Zodia Markets relationship to Zodia Custody and Standard Chartered.

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