Dr Ozan Özerk: Banks and Crypto Must Stop Fighting Over Stablecoins and Start Working Together

The long-running tension between the banking industry and the cryptocurrency sector has reached a new high, this time centred on stablecoins, digital tokens pegged to traditional currencies such as the US dollar.

According to fintech founder Dr. Ozan Ozerk, the debate has been clouded by misinformation and misplaced fear. In his latest article for the Forbes Finance Council, the founder of OpenPayd and EMBank argues that the threat posed by stablecoins to traditional banking is being grossly overstated - and that collaboration, not confrontation, is the only sustainable path forward.

Recent lobbying from US banking associations has warned that allowing crypto exchanges to offer interest on stablecoin holdings could cause as much as $6.6 trillion in deposit flight, potentially destabilising the banking system. However, Dr. Özerk points out that this figure is based on a misreading of the underlying data.

"The $6.6 trillion number being quoted refers to the total amount of liquid cash in the US economy, not projected outflows into stablecoins," he explains. "The real potential shift is a fraction of that, perhaps between $400 and $700 billion. That's meaningful, but it's hardly a systemic threat."

Dr. Özerk is well-placed to comment. As the founder of EMBank, a licensed European bank, and OpenPayd, a global Banking-as-a-Service provider that has recently integrated stablecoin payments, he has first-hand experience of both sides of the argument.

He acknowledges that banks' concerns over deposit flight have some basis - after all, the fractional-reserve model depends on deposit stability. But he believes the scale of the risk has been amplified for political and competitive reasons. "Stablecoins are exposing inefficiencies that have existed in banking for decades," he says. "The average savings account earns around 0.6 per cent, while stablecoins generate higher yields through investments in short-term Treasuries. Consumers naturally gravitate towards better value."

Still, Ozan Ozerk concedes that regulation must evolve to ensure fairness. "If exchanges behave like banks, they should be subject to comparable oversight. However, the current banking framework wasn't designed for blockchain's instant and borderless nature. We need new, fit-for-purpose rules, not restrictions."

Rather than resisting change, Dr. Ozerk calls for a new era of bank-crypto partnerships, combining the compliance expertise of traditional finance with the agility of blockchain technology. He highlights the emerging collaboration between JPMorgan and Coinbase, which occurred earlier this year, as a sign of what's to come.

"The banking industry has the experience and regulatory infrastructure. Crypto brings innovation, transparency and speed. Together, they can create a financial system that serves consumers far better than either could alone."

In his Forbes piece, Dr. Özerk likens the banks' reaction to the "seven stages of grief", suggesting the industry has reached the stage of anger but has yet to reach acceptance. "Change is inevitable," he concludes. "And when it comes, the smartest players won't fight it, they'll embrace it and find partners who complement their strengths."

The full version of the article can be found here on Forbes Finance Council website. https://www.ozanozerk.com/articles/the-clash-over-stablecoins-in-banking-how-collaboration-can-strengthen-finance/

Contact Person: Dr. Ozan Ozerk
Email: info@ozanozerk.com
Country: United Kingdom
Address: The Bower, 207-211 Old Street, London, England, EC1V 9NR, UK
Website: https://www.ozanozerk.com/

Dr. Ozan Özerk, born in Nicosia, Cyprus in 1979 and raised in Norway by academic parents specializing in education and learning disabilities, has built a remarkable career bridging medicine, technology, and finance. After serving as a Norwegian Armed Forces Ranger and completing medical school at the University of Oslo (2000-2008), he co-founded the pioneering social network Biip.no in 2005, which was acquired by Egmont and Nettavisen for over 100 million krone in 2008.

Following years as an emergency room doctor until 2015, he pivoted to fintech, establishing a portfolio of successful ventures including OpenPayd (2018), a London-based Banking as a Service provider; EMBank (2018), a European Central Bank-licensed institution in Lithuania; Ozan SuperApp (2018), offering financial solutions across Europe and Turkey; Eurotrader (2018), a regulated retail broker; and Bitpace (rebranded from Lydiax in 2023), providing blockchain and crypto payment solutions globally.

A Forbes Finance Council member since 2021, Dr. Özerk is recognized as a fintech pioneer and advocate for financial inclusion, frequently sharing his insights on the industry's future through interviews and opinion pieces.

This release was published on openPR.