Crypto Weekly: Why stablecoins could matter

From stablecoins catching everyone's attention to crypto giants ploughing money into the US midterms, this is Crypto Weekly. A group of 21 financial institutions plan to create a company this year to issue a cryptocurrency pegged to the dollar. Big hitters like Goldman Sachs, Bank of America and Citi are involved in the project. They aim to launch in the first half of next year. The group further said it wants to expand into stablecoins pegged to other G7 currencies including the euro as a priority. Stablecoins are a type of crypto asset designed to maintain a stable value. They are also used to move money around the world in the form of cryptocurrency and mostly used in crypto trading. The European Central Bank should embrace blockchain technology. That was the case made by ECB board member Isabel Schnabel. She believes it could help safeguard its role at the centre of the financial system rather than private alternatives like stablecoins. She further argued the shift could help it respond faster to market problems. Stablecoins don't credibly act as a means of payment at scale. That was the argument made by the head of Bank of International Settlements in Jackson Hole. Pablo Hernandez de Cos believes tokenised deposits should make up most of the day-to-day payments and stablecoins should hold a more specialised role. De Cos, who is a candidate to take over from ECB President Christine Lagarde next year, sees many issues with stablecoins. He thinks bank funding costs could rise and stablecoins could break the singleness of money as customers can't jump between products without selling and buying at cost. Companies donated a record $646 million to US political campaigns in the 18 months through June. It's 40% more than the total spent during the entire 2024 presidential election cycle. That's according to data from watchdog group Public Citizen. The crypto sector is the biggest corporate donor to US elections among industries. Public Citizen said together with online betting and AI, they made up for more than half of all company donations at $344 million.