Stablecoins Like Libra Has Huge Growth Potential According To JPMorgan

cryptowarrior88 (59)in #cryptocurrency • 5 years ago

An analyst from one of the world’s largest banks, JP Morgan has recently stated that stable coins have the potential to grow significantly.

However, the analyst also notes that despite this potential there is the risk of payment system gridlock using this type of asset class especially during periods of highest utilization.

While Stablecoins may have the potential to grow substantially and might even corner a significant amount of global transaction activity in the future they might encounter the risk of growing too fast.

In doing so they might be subjected to bottlenecks brought about by the insufficient short-term liquidity compared to other payment systems existing today.

The analyst also as special concern with libra pointing out that there is a risk for negative yields as any system that relies on reserve-asset income to fund operations and another ongoing cost becomes unstable in a negative yield world.