$2.5 quadrillion clearing giant DTCC explores stablecoin
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The Depository Trust & Clearing Corporation (DTCC), one of the world's largest transaction processors, is exploring a stablecoin to keep up with rising blockchain adoption in finance.
A New Jersey-based financial infrastructure company source told The Information that it has been weighing a U.S. dollar-backed stablecoin for faster and cheaper trade settlements. It also believes they could ease the movement of assets across the various markets it operates.
In a separate statement to The Block, a spokesperson for the company confirmed the stablecoin venture, describing it as part of its mission 'to protect and advance the global financial markets.'
'…we are monitoring policy developments in the U.S. Congress and regulatory agencies, and will continue to assess our options, including the potential of issuing a DTCC stablecoin, if needed, to support the industry's increasing adoption of blockchain technology for use in financial transactions,' the spokesperson said.
DTCC is the world's largest clearing and settlement company, serving all major U.S. exchanges and broker-dealers. Together with all its subsidiaries, it processes over $2.5 quadrillion annually, making it one of the key cogs of the global financial plumbing.
Just days before the reports, DTCC published a blog post noting that institutional stablecoins and tokenized money market funds are reshaping liquidity in financial markets.
'…it is evident that stablecoins are here to stay and will impact not only payments but broader capital markets,' it said, further describing stablecoins as 'a critical component of the evolving capital markets landscape.'
However, it acknowledged that stablecoins will only become part of the financial system if regulators implement enabling policies. It singled out the ongoing legal clarifications by U.S. lawmakers and the European Central Bank's (ECB) stablecoin frameworks as some key initiatives that will shape global regulations. It also hailed Bermuda's licensing of recently IPO'd stablecoin issuer Circle (NASDAQ: CRCL).
Days before it confirmed its stablecoin plans, DTCC announced a new partnership with Fnality that will integrate the latter's on-chain settlements system into the clearinghouse's digital asset platform.
Fnality is a startup backed by major financial players, including the DTCC, Goldman Sachs (NASDAQ: GS), Nasdaq, MUFG (NASDAQ: MBFJF), UBS (NASDAQ: UBS) and more. It provides an on-chain payment system for wholesale financial markets, replacing the slow and inefficient interbank settlement rails.
Under the new partnership, the two will enable clients to automatically transfer assets in real time while also eliminating the need for fragmented liquidity accounts. DTCC joins a bevy of financial industry giants targeting stablecoins as the sector records parabolic growth. This week, American fintech giant Fiserv (NASDAQ: FI) launched FIUSD, its new stablecoin, which will be available to over 10,000 financial institutions and over five million merchants. FIUSD is built on stablecoin infrastructure from Paxos and Circle.
Earlier this month, it was revealed that Walmart (NASDAQ: WMT) and Amazon (NASDAQ: AMZN) were exploring launching their own stablecoins. The two are the biggest U.S. retailers and, combined, account for over $1.1 trillion in annual revenue.
Bermuda's government stablecoin push continues
Elsewhere, the island territory of Bermuda continues to warm up to stablecoins. This time, the government has backed an event with a stablecoin airdrop for the attendees.
During the Bermuda Digital Finance Forum, attendees who downloaded a digital wallet developed by Coinbase (NASDAQ: COIN) received $100 worth of USDC that they could use to pay for food and drinks at the event.
'We want Bermudians to be part of this growing industry,' Premier David Burt said in a follow-up statement.
The government has been working toward making digital finance more accessible, and the event offered the attendees the opportunity to 'experience what the future of money looks like,' he added.
Bermuda is a British Overseas Territory in the North Atlantic Ocean with 65,000 residents. Its $8 billion GDP relies almost fully on international businesses, mainly in finance, which set up operations on the island.
One of these is Circle, the USDC issuer; after acquiring tokenization platform Hashnote earlier this year, Circle moved it to Bermuda to capitalize on the island's friendly licensing.
'Bermuda is a global gold standard in regulation,' Circle President Heath Tarbert stated as he revealed he would be moving Hashnote from the Cayman Islands.
Hashnote operates one of the largest tokenized money market funds, with assets under management hitting $1 billion earlier this year.
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