Kaiko report: The troubled Silvergate may improve the role of stable currency in encrypted transactions

On March 7, Kaiko, a market research company, said in a report released on Monday that the troubled Silvergate Capital decided to close its popular instant settlement service SEN among large investors, which will improve the role of stable currency and its issuer in encrypted transactions. Kaiko’s report said: “With the demise of SEN, stable currency may become more common among traders.” Kaiko predicted that traders would no longer use bank channels to deposit dollars in the cryptocurrency exchange, but transfer funds to the issuer of stable currency to obtain stable currency, and then deposit stable currency in the exchange. The report added: “But the problem is that the issuer of the stable currency still needs to access the cryptocurrency bank, so now the risk is further concentrated.”

Interpretation of this information:

Market research firm Kaiko recently released a report stating that troubled company Silvergate Capital has decided to close its popular instant settlement service SEN among large investors. This decision is expected to have significant implications for stable currencies and their issuers in encrypted transactions. According to Kaiko, the demise of SEN will make stable currencies more common among traders. The report goes on to predict that instead of using bank channels to deposit dollars in cryptocurrency exchanges, traders will transfer funds to stable currency issuers to obtain stable currency and then deposit that in the exchange.

While this shift towards stable currencies has the potential to streamline transactions, there are also concerns about the concentration of risk. The issuer of the stable currency would still need to access the cryptocurrency bank, which could further concentrate risk.

In summary, the report highlights the following points: