"Wow, if it's like that, everyone must like it, right? Does anyone hate it?"
Asset manager Fidelity believes that interest rate cuts by the Federal Reserve (Fed) could renew the interest of major institutions in decentralized finance (DeFi) including stablecoins as long as the infrastructure continues to develop this year.
Although Fidelity expected institutions to dive into DeFi for its earnings last year, it didn't end there as rising interest rates prompted them to shift to digital assets that are considered safer.
Previously, many parties not only thought that DeFi was difficult to use, but were also seen as the most vulnerable platform to hacking and exploitation, causing institutions to examine the risks associated with smart contracts.
Even so, 2024 could see institutions have a renewed interest in DeFi revenue should it once again become more attractive than TradFi revenue as well as more advanced emerging infrastructure.
After updated rules from the Financial Accounting Standards Board (FASB) allow firms to report paper losses* and gains from their crypto holdings, Fidelity expects companies to be more comfortable with the idea of putting digital assets on their balance sheets.
*Loss in investment value, etc. that appears in the account, but that does not involve actual cash loss,
As for stablecoins, Fidelity predicts institutional exploration for assets pegged to the US dollar will gain traction this year as consumers seek faster and cheaper payments.
So here it can be seen that the regulatory framework will become clearer and Tether (USDT) and USD Coin (USDC) will not lose their value this year as the crypto market may continue to gain traction coupled with the expectation of interest rate cuts.
