I have theorized that, once the United States provides regulatory clarity regarding stablecoins, we will see an explosion of the number of coins that are rolled out. This will come from companies across the spectrum, including technology, retail, finance, and a host of other industries.

Why would this happen?

This is a valid question that is worthy of consideration. In my view, there are a number of reasons for companies to do this.

In this article we will explore the reasons behind this.

Stablecoins offer a new opportunity for companies.

As stated, it is going to require regulatory clarity before major firms jump in. Recently, we have highlighted how Bank of America is on record as stating it will bring out its own token once things are brought into law.

This is an important point to mention. While many in the crypto world are averse to regulation, large companies are not. Naturally, they cannot stand over-regulation. That said, what is important to them is to simply know the "rules of the game". They have the money to employ the legal team to ensure compliance (and to negotiate settlements when they stray).

Here is a key for the crypto market. The United States, especially over the past few years, has not provided regulatory clarity. Instead, the Securities and Exchange Commission (SEC) opted for enforcement. It was a decision that had a catastrophic impact on the industry within the US.

As they say, it is a new dawn and that certainly is the case for crypto.

It appears to be the goal of the new administration to get a crypto bill passed. At the center of this, from what we can ascertain, is stablecoin regulation. This is what a host of companies are awaiting.

I went through the reason for why the government wants to do this. Here we will look at the benefits for corporations.

This is a big one.

Since my presumption is that approval will require backing the coins with assets, it seems likely the US Government will opt for US Treasuries to fill that role. This means, as we saw, T-Bills will be backing the majority of the coins.

The process here is simple:

US dollars are fed into the platform, producing the coins. The incoming currency is split 80/20 between T-Bills and cash. The bill earn interest which goes to the company.

Another way to look at it is this:

The company is providing $1 of value transfer. This is an equal swap for the dollar it receives. What is different is the payout. Since 80 cents is going to T-Bills, that earns money without the company giving up anything.

The present rate on the 1 month bill is 4.3%. It is likely that Big Tech firms like Meta and Google end up rolling out billions of coins. Do the math and that is a tidy sum being pulled in every year.

One of the main goals of marketing is to get one's name in front of as many people as possible in a repetitive manner. This is why companies like McDonald's run a ton of television ads. Rarely does one see an commercial, get out of bed, and go buy a Big Mac. However, the repetition is crucial for name recognition.

A stablecoin helps with this.

Consider this: PYUSD.

Here we have the stablecoin PayPal brought out a couple years ago. This is something that is tied to their platform. Being involved in FinTech, they were one of the early adopters of this concept even though regulation was uncertain.

Knowing that PYUSD is tied to PayPal, what do you think when you see it? The answer is PayPal.

What happens if we come across a BOAUSD? This could be the stablecoin that Bank of America brings out. Each time someone transacts in it, the name is right there.

XUSD. METAUSD. GOOGUSD. AMZNUSD. DISYUSD.

I think you get the point.

Depending upon how these are structured, if they end up traded on a variety of exchanges, we could see the tentacles of the marketing expanding. There is no reason, if they are an ERC-20, that the Meta's coin could not be used outside its platform.

This is a big one. People have often discussed the idea of cryptocurrency replacing reward programs. Actually, they are basically the same except for the fact that reward points tend not to be transferrable.

Crypto changes this. It also allows for layers of creativity and innovation.

One thing that jumps out at me is the interest payments. While this can help a companies bottom line, what about directing part of that towards customers.

Tokens can be issued based upon reaching certain rewards levels. This is effectively paying them in cash, something that everyone loves.

Reward programs are designed to keep bringing people back. That is why the points (or however they are quantified) cannot be transferred. It is also why they tend not to do cash. The company does not want one to take the money and spend it elsewhere.

With a stablecoin, things are different. If the person take the coin and makes a purchase elsewhere, what happens to the token? It is transferred to another wallet, i.e. pushing the marketing further out.

Another idea is to implement a staking program. Again, this could be done to foster even more brand recognition while tying people to the company.

For example, a hotel chain could provide frequent guests with coins for their patronage. If they are staked, based upon certainly levels, perhaps there is a discount on the room or free upgrade.

Of course, this is one way to enhance the distribution of the coins.

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