Stablecoin Rise: US Banking Limitations & KYC Challenges
The increasing dominance of stablecoins is partly due to limitations within the US financial system, according to Jerald David, President of Arca Labs. Speaking at the TokenizeThis 2025 event on April 16th, David highlighted restricted banking hours and the lack of readily available non-USD trading pairs as key factors driving stablecoin adoption.
Limited US Banking Hours Fuel Stablecoin Growth
David explained that traditional banking's nine-to-five schedule doesn't align with the 24/7 nature of the crypto industry. He emphasized the imminent arrival of payment systems combining yield-bearing instruments with stablecoins, addressing this critical limitation.
KYC Compliance and Stablecoin Use Cases
The panel also addressed Know Your Customer (KYC) procedures for stablecoins. While a representative from Figure Markets noted the KYC requirement for yield-bearing stablecoins due to tax implications, David differentiated between various stablecoin use cases. He argued that using stablecoins for everyday transactions, such as buying coffee, shouldn't necessitate AML or KYC checks.
Nick Carmi, Head of Exchange at Figure Markets, proposed a trust-based KYC system enabling users to transfer their credentials across platforms, streamlining the process and reducing friction for users navigating multiple crypto ecosystems. This would alleviate the current burden of completing separate KYC checks for every service.
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