Home News FTX offers a $1M prize for banks to accept stablecoins

FTX offers a $1M prize for banks to accept stablecoins

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FTX crypto derivatives exchange will allocate $1 million to encourage regional banks that will consider and agree to add a service for depositing and withdrawing funds through stablecoins.

Thus, the initiative involves the establishment of partnerships with FTX in the interests of its users, who will be able to “instantly and almost without commissions” replenish the account and withdraw funds. Moreover, the names of the stablecoins are not given.

Also, the crypto derivatives exchange does not exclude an increase in the amount of remuneration. FTX is open for cooperation not only with American financial institutions.

The risks associated with stablecoins

In addition, an offer came the day after the tweets of the CEO of the platform, Sam Bankman-Fried. In it, among other things, he touched upon the topic of stablecoins. Which “lack a reporting and auditing system to guarantee their provision”. Furthermore, FTX CEO believes that this will solve “80% of the problems” in the segment.

In November, the President’s Working Group on Financial Markets (PWG) compiled the report. In which it listed the risks associated with stablecoins and recommended equating issuers of assets to banks.

Supervision, according to PWG, should be carried out both at the level of such an institution and at the level of the holding company to which it belongs. The report talks about the need for restrictions on the affiliation of issuers with other commercial organizations.

Crypto as threat to financial system

In December, the Office of the Comptroller of the Currency (OCC) as part of the US Treasury promised to submit additional recommendations in 2022 regarding the integration of cryptocurrencies into the product lines of banks.

“This involves providing expertise to identify and eliminate strategic, operational, regulatory and reputational risks. Sound product management also includes compliance with the bank’s strategic objectives, investment profile, resources and experience,” the report says.

Recall that the US Financial Stability Oversight Council (FSOC) identified stablecoins and crypto as threats to financial system. According to the FSOC, illiquidity, a lack of sufficient safeguards, opacity surrounding redemption rights. As well as cyber-attacks could all impair consumer confidence in stablecoins. “During pressured market conditions, a run on stablecoins has the potential to magnify a shock to the economy and financial system”, according to the study.

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