For Banks, The AI and Stablecoin Reckoning Is Happening Now

AI is at a cross road, will mass adoption come from trust or AI Factories?

The Desperate Man, 1843 by Gustave Courbet. A striking work that plunges the viewer into an intense confrontation with its subject. The face of a man, his eyes wide and his hair dishevelled, emerges from the darkness, his hands clenched on his cheeks, as if caught in a whirlwind of emotions. The expression is one of deep distress, of almost palpable anguish.

Thanks for reading the “Cashless” newsletter, an insider’s view on Asia’s fintech, CBDC, and AI for anyone striving to understand “the Asia Century.” I’m Rich Turrin, and these are my hard-hitting insights designed to educate and inform. Subscribe to get these emerging trends directly in your inbox every Sunday. Every week, I scan thousands of articles to find only the best and most valuable for you. Subscribe to get my expertly curated news straight to your inbox each week. Free is good, but paid is better.

Topics:

• US Dollar Stablecoins are Going Mainstream: Brace for Impact

• For Banks, The AI Reckoning Is Now

• Five Killer Tests for Stablecoins End In a Stalemate

• Optimizing Cross-Border Payments In APAC, No Easy Task for Visa

• How to Scale AI in APAC through Trust, not "AI Factories"

• Bonus Read: ScamGPT: GenAI And The Explosion in Automated Fraud

• Bonus Video: I talk chips and de-dollarization

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Happy Sunday!

I specifically chose today’s art, Courbet’s “Desperate Man,” to convey the state of shock and desperation that many bankers are now in or will soon experience.

Technology is profoundly impacting banking, and this week, the Senate passed the first of two votes on the GENIUS Act, which will make USD stablecoins a reality.

Our first two articles show how banks face existential threats on two fronts: stablecoins, which impact their cash transfer business, which accounts for roughly 25% of revenue, and AI, which demands that they reinvent their banks.

Our first article covers stablecoins and the GENIUS Act. For those who don’t know, the Act passed the first of two votes required in the Senate. It is likely to be lightly amended but may pass next week.

This article will bring you up to date and provide two PDFs: one from Visa on stablecoins, which highlights the key issues at stake, and a second, an “FAQ” document from the Senate on the Genius Act.

The passage of the first vote of the GENIUS Act is perfectly timed with the WSJ article that revealed discussions among five major US banks to establish a consortium for issuing a USD stablecoin. If there is ever a game-changer for stablecoins, it would be one where large US banks take them mainstream.

Next, we have more on AI with a candid report by BCG consultants that correctly informs banks that what they do in the next few years with AI will impact the next thirty years. While BCG’s tactics are harsh, they are correct, and after reading my article and the report, bankers will likely resemble the painting above.

I’ve covered stablecoins in great detail over recent months, and I expect to cover them further as banks adapt to a new form of digital dollar that will bring innovation and market disruptions.

Still, a fundamental question remains: Are stablecoins “good to go?” My scoring of “five killer tests for stablecoins” indicates that it’s a stalemate, with stablecoins still requiring improvement before they are ready to go mainstream.

This is why a US bank consortium could be a game changer, as it would build mass-market-friendly on- and off-ramps for stablecoins. As it stands, asking people to visit an exchange to buy a stablecoin separate from their normal bank is not a user-friendly approach.

Our next two articles are specifically tailored for the APAC region, covering AI and cross-border payments.

The first looks at Visa’s cross-border payment dilemma. Asia’s new cross-border payment technology primarily focuses on real-time payments and offers little assistance to Visa’s card network. So, what can Visa do as it watches the market, the region’s payments move out of its grasp?

The second proposal suggests that trust is the way to scale AI, rather than “AI Factories” as recently proposed by Nvidia, which plans to build such a factory in Taiwan.

Finally, our bonus read about ScamGPT and shows how GenAI is automating scams and making them more pervasive than ever. As always, any technology can be used for good or evil, and fraudsters have latched onto GenAI as the new frontier in scams.

And today, a double bonus!

I have a great video in which I discuss de-dollarization and chip bans with Dr. David Oulaalou on the “Geopolitical Trends” show.

Thanks once again for reading. I appreciate each and every one of you taking the time to open your inbox for me!

Rich

PS

Thanks for sharing with your friends! It’s a great way to say thanks.

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US Dollar Stablecoins are Going Mainstream: Brace for Impact

The Wall Street Journal reports that a bank consortium may enter the stablecoin market.

I have two PDFs on stablecoins for you today and big news that Bank of America, JPMorgan and others may partner to launch a stablecoin.

The Wall Street Journal just reported that JPMorgan, Bank of America, Citigroup, and Wells Fargo have discussed the possibility of jointly issuing a stablecoin. Zelle and the Clearing House networks were also involved.

To understand how big a risk this is for existing stablecoins, I ask readers to pick which issuer you’d rather have on $100,000 in stablecoins: Paxos, Tether, or a consortium of 5 US banks? See my point?

Read more about the GENIUS Act and why it is a US government takeover of USD stablecoins, and that isn’t all bad…..

For Banks, The AI Reckoning Is Now

What banks do in the next five years will define the next thirty

The management consultant BCG goes for shock therapy with banks, declaring that banks aren’t keeping up with Agentic AI and that what they do now will define their future.

BCG is correct!

The consultant tackles real problems with bank AI investment and boldly slams banks’ AI investments, stating that " too much funding is going toward isolated productivity improvements rather than broader transformation.”

See why digital platforms are banks’ new nemesis….

Five Killer Tests for Stablecoins End In a Stalemate

Stablecoins are great, but still need work for mass acceptance

Stablecoins offer real payment advantages, but when I score the “five killer tests,” it ends in a stalemate that shows they still need work for mass adoption.

I like stablecoins—I’ll say that from the start—but as regular readers know, I’ve been critical of them because they are far from the payment panacea claimed by crypto bros.

See why every time you read a document on stablecoins, you need to search for “depeg” (in all its forms) as a key test……..

Optimizing Cross-Border Payments In APAC, No Easy Task for Visa

Cross-border innovations in APAC focus on RTPs, not cards.

Visa wants in on APAC’s projected cross-border payment market of $250 trillion by 2027.

The problem is that all of the new technology is real-time payment (RTP)-oriented and unsuitable for cards. Forcing Visa to actually launch QR payments in Asia a year ago. RTP is the new benchmark in payments.

When did Visa ever set a benchmark in payments?……… read on…. was it in 1995?

How to Scale AI in APAC through Trust, not "AI Factories"

AI is at a crossroads and must choose between high-speed growth and trust

Deloitte Asia Pacific with an impressive paper that is devoid of hype and states clearly that “trust is the path to AI scale.”

This couldn’t be more true, and it is interestingly contrary to another big announcement yesterday impacting APAC from AI chip manufacturer Nvidia that it was building an “AI Factory.”

AI trust is key, and while a “factory” may produce more AI, is it trustworthy? Read on to find out why that’s unlikely….

Bonus Read

ScamGPT: GenAI And The Explosion in Automated Fraud

ScamGPT GenAI And The Automation Of Fraud

1.75MB ∙ PDF file

Download

What a read! GenAI fraud is a scourge on society, and sadly expanding. What is particularly interesting is the social component to scams an how they attack marginalized communities first.

Download

It's time to step back from the marvel of GenAI and Agentics and examine how they fuel the “golden age" of scams.

The scam market was worth an estimated $53.6 billion in 2023, and GenAI is helping to change the game and increase that number even higher.

GenAI is making scamming even easier, faster, and more accessible, fueling a surge in scams and misinformation worldwide.

Bonus Video: Chip Bans and De-dollarization

I was on the “Geopolitical Trends” podcast with Dr. David Oulaalou this week, where I discussed these two big geopolitical topics. This was a fun discussion about topics that are dividing China and the US. I hope you enjoy it!

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• The Genius Act and Big Tech

  The XXX comes out with a sharply worded document against the GENIUS Act which allows Big Tech to issue stablecoins. How different are payment companies from banks? It’s a grey line!

• Grey Market Report: Next-Gen Digital Banking

  This is one small way I like to add value to my subscribers. I can’t share this report openly, but among my subscriber base, I think it's fair game, as it has already been leaked on social media.

• What’s Next for Fintech and Payments?

  At least we know that stablecoins is the answer to the question: “What’s new in payments?” This is a solid read covering major trends in fintech, and spoiler alert, fintech these days is 85% payments!

• And that’s just three of six reports. You’re also missing the infamous Chart of the Day, which today covers “The Growth of Tokenized Assets.”