The International Capital Market Association (ICMA) published a short stablecoin report provocatively titled “An impractical distraction or a powerful alternative?”. Rather than delving into specific stablecoins, it explores high level pros and cons of using them in capital markets, particularly for the settlement of on-chain digital assets. It concludes that stablecoins have plenty of potential in capital markets.
Some stablecoin benefits are shared with other types of tokenized money used on distributed ledgers. For example, they enable 24/7 on-chain settlement, which can help to address strict cut off times. Plus, most types of tokenized money are programmable.
It rightly identifies that one of the biggest specific benefits of stablecoins is accessibility. Early tests regarding the use of wholesale CBDCs in capital markets in 2018 raised this as an issue: brokers and other market participants also want access to tokenized money. That said, many tokenized deposit solutions are becoming available to corporate and institutional users, but not yet for retail investors. But most still lack the same broad accessibility as stablecoins have.
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