Quant Analyst Says Legacy Financial Institutions Are Eyeing an Ethereum-Dominated Area - Here's Why
Ki Young Ju, CEO of online insights platform CryptoQuant, predicts that the traditional finance sector will make its way into the decentralized finance (DeFi) sector in the next few months.
Young Ju told his 304,800 Twitter followers that stablecoins are leading in terms of institutional adoption.
As proof, he pointed to US Federal Reserve Chairman Jerome Powell, who told Congress in January that central bank digital currencies (CBDCs) could be the same. exist with stablecoins.
Young Ju also noted that the world's largest asset manager, BlackRock, led a $400 million funding round for Circle, the issuer of USD Coin (USDC), earlier this year.
Explains the CEO,
“As more use of USD-denominated stablecoins [consolidates] the supremacy of the dollar, TradFi institutions are allowed to invest in stablecoin projects.
But to get more transaction volume, stablecoins need more powerful use cases from DeFi. Investing in DeFi will be their next goal. Young Ju isn't the first crypto expert to suggest stablecoins could boost the adoption of other digital assets: Earlier this month, Fidelity's global chief macro officer, Jurrien Timmer argues that favorable stablecoin regulation could act as a catalyst for Bitcoin (BTC) adoption.
“If stablecoins are regulated and considered safe and we don't have the barn headlines we had not too long ago and the space is legalized, then I think maybe the Investors will be more confident that the network effect, Bitcoin's adoption curve, has followed a number of historic escrows whether it's internet or mobile usage.
As the space becomes more legitimized and scaled up, I think more and more investors can start to feel comfortable that this promise of an expanding adoption curve can actually be. be done. "
Aug 25, 2022