Stablecoin Growth Tests 24/7 FX Liquidity
Stablecoin growth is expected to put 24/7 foreign exchange liquidity to the test, according to TransFi CEO Raj Kamal. He believes that as more local-currency stablecoins are launched, they will increase demand for round-the-clock FX liquidity. Currently, over 70% of conversions into dollar stablecoins begin in another currency.
Kamal notes that although blockchain settlement can remain available during nights, weekends, and holidays, continuous token transfers do not guarantee continuous access to deep currency markets. Companies may want to move money late on Friday or during Asian trading hours when the underlying currency pair has limited activity.
The process of converting a stablecoin can take seconds, but securing the pricing and depth normally available during the working week can remain difficult at certain times. Kamal warns that large conversions outside normal trading hours may become materially more expensive.