Stablecoins: Latest Disruption to Traditional Banking

Roy Girasa, Professor of Law, Pace University, USA

Traditional banking services, as most other financial endeavors, have endured an onslaught of changes due to digitalization brought about initially by the popularization of computers coupled with the internet and then bitcoin based on blockchain technologies. The latter development was directly aimed at the elimination of third-party involvement especially by banks and governmental regulation. With some 6,000 cryptocurrencies in existence, bitcoin has taken center stage that began with a valuation of numerous bitcoins as the price of a pizza to over $65,000 for one bitcoin. The claimed advantages of bitcoin and many other cryptocurrencies are the privacy of the parties engaged in transactions, lessening of costs associated with use of financial third-party services, global acceptance of the currency particularly in countries whose monetary systems are suspect, unhackability, and other advantages. The disadvantages include lack of governmental backing, extraordinary volatility, dearth of speed in engaging multiple transactions, loss of currency if private key is lost, grid power required for their deployment, and other shortcomings.

Distinguished Professor, Pace University, New York (since 1980). author of six books on cyberlaw, law of finance, shadow banking, blockchain and cryptocurrencies, and artificial intelligence (Palgrave Macmillan) and over 130 articles. Lectured globally.

Lubin School of Business, Pace University, Pleasantville, New York.