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Bank treasurers remain wary of stablecoins, but there is good news and bad news. First, the bad news is that instant payment systems, where volumes are growing by leaps and bounds and which stablecoins are one type, are going to increase the mix of low-yielding HQLA that banks will need to hold on their balance sheets, to the detriment of their NIMs. The good news is that first, no one in their right mind sits in cash, so the risk to deposits seems overdone. But the even better news is that global cross-border payment flows neared $1 quadrillion last year, and the average size of a single payment is often over $50 million, well beyond what other instant payment methods like FedNow and RTP typically handle, and thus an excellent use case for stablecoins. The beauty of these coins from an issuer’s perspective is that they are managed off-balance sheet by a third party, while the issuer earns 100% of the interest generated from the assets it places in the reserve fund until the holder cashes the token.