Very Short Blog

Zelle owner Early Warning Services exploring stablecoin [Issuance] for retail bank customers. https://finance.yahoo.com/news/zelle-owner-early-warning-services-exploring-stablecoin-for-retail-bank-customers-154503674.html

EWS is certainly the right consortium to Issue a SC given KYC and their existing RT Zelle settlement rails (which also integrate to TCH RTP). The CX interface for particiapting zelle banks is also there, setting up a “transfer” like issuance process. Within Online Banking the big change will be showing stablecoin balances in a new account or something.

In my view the exploration will find no market for a bank stablecoin in US, just as PayPals PYUSD has no volume because it has no users. I still think this is a great idea, to get bank teams up to speed on the tech and what it would take to collaboratively move on this should there be a driver.

In the near term, Solana’s Token-2022 spec is the only real option for banks as it provides for transfer fees and a permanent delegate (Issuer can transfer or burn any token units from any user’s account, effectively acting as an all-powerful administrator). See my blog In a World of 1000 Stablecoins 4 Key Questions

Retail banks could possibly see this as Durbin pricing end run. But as a former banker, the most logical UC would be retail bill payments as well as high value transfers (think mortgage payment with complex escrow and multi party settlement).

Thoughts?