Franklin Templeton Head of Innovation Sandy Kaul expects many banks to amend their business model and become issuers of their own stablecoins. She speaks with Sonali Basak and Tim Stenovec on "Bloomberg Crypto."

Franklin Templeton's Head of Innovation, Sandy Kaul, anticipates that a significant transformation is on the horizon for the banking industry with the advent of stablecoins. Kaul shared her insights during a conversation on "Bloomberg Crypto" with hosts Sonali Basak and Tim Stenovec. She suggests that a shift from multiple account-based ledger systems to a single, blockchain-based ledger will be one of the core changes as banks begin issuing their own stablecoins.

Kaul explains that stablecoins are becoming a crucial innovation within this new financial ecosystem. These coins, which are often pegged to a fiat currency like the dollar, enable transactions to occur entirely within a blockchain wallet system. As more fiat currency is converted into stablecoins, this wallet-based system could fuel a growing number of on-chain transactions, moving away from traditional banking practices.

The transition could result in stablecoins replacing traditional transactions that typically occur through checking accounts. Kaul likens the digital wallet used to store stablecoins to an on-chain checking account that operates independently of the fiat banking system. The stablecoins can circulate extensively within the blockchain ecosystem without needing to return to the traditional economic framework.



Franklin Templeton sees banks issuing stablecoins soon

What changes in the banking model from it if they can pursue this at greater scale. Yeah the biggest change that we can expect here is that we're moving from an account based structure world where you have multiple ledgers each bank having its own ledger each bank really needing to administer its own set of clients individually to a single ledger block chain based world where you operate out of wallets and stable coins are really proving to be the pillar app of this new ecosystem in terms of creating the flow of capital that is keeping this wallet based ecosystem operating. And what we're starting to see is that the major banks are starting to understand that the opportunity space is shifting. More fiat currency is getting locked into stable coins. Those stable coins are staying deployed in a wall based ecosystem. And that's creating this fuel to really allow for a growing set of transactions to occur on chain and out of the traditional economy. So what would this replace Sandy that banks currently use. So this is replacing a lot of what we usually see moving in and out of our checking accounts. You can almost think of the stable coins that sit in my digital wallet as my on chain checking account. And it is allowing more people to remain fully out of the fiat banking system and using just stable coins because the same stable coin which is backed by a dollar let's say can circulate over and over and over within the block chain wallet based ecosystem without ever getting cashed back out to a dollar in the regular real world economy.

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Kyiv

Ukraine Invasion

Russia hits Kyiv with largest drone attack after Trump-Putin call

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Jerusalem

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Global Tariffs

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Gilimanuk

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Manhattan

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Tehran

Iran Strikes

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Lhasa

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Bryan Kohberger changed his plea to guilty Wednesday for the 2022 murders of four University of Idaho students. CBS News national correspondent Carter Evans has more on the case.

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Everglades

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