Industry insiders: Despite strong development momentum, stablecoins still face regulatory uncertainty

Industry insiders point out that despite the momentum, stablecoins still face significant obstacles that could limit their adoption. Regulatory uncertainty looms. Dan Elitzer, co-founder of Nascent, highlighted the risks that emerged when Silicon Valley Bank collapsed last year, which led to a slight depegging of Circle's USDC stablecoin. Elitzer said these risks will persist until a clear regulatory framework is established. Credibly Neutral general partner and Coinbase protocol expert said there are still risks in relying on traditional banking infrastructure. He pointed to events such as "Operation Chokepoint 2.0" and the collapse of cryptocurrency-focused banks such as Silvergate Bank as examples of how much stablecoins rely on traditional systems. However, he is optimistic about the prospects and believes that upcoming U.S. legislation can mitigate these risks. Compliance needs are intensifying. Will Nuelle, general partner of Galaxy Ventures, pointed out that payment businesses, especially at the entry and exit layers, must also excel in compliance to maintain banking relationships. This is both expensive and challenging. Anil Hansjee, general partner at Fabric Ventures, said that as the category becomes increasingly regulated, stablecoin issuers face huge obstacles. He highlighted the challenges, which include technical, regulatory and banking complexities, as well as go-to-market strategies for stablecoins at scale. Hansjee said: "It is possible to enable an autonomous banking experience by running or working with L1 or L2 blockchains optimized for processing and payments. These solutions will effectively create a completely new end-to-end on-chain acceptance and settlement process (bypassing traditional networks such as Visa, Mastercard or banks) so that merchants can get faster payments at lower fees." (The Block)