Stablecoins have gained popularity largely due to the constraints of the US banking system, according to Jerald David, president of Arca Labs. Speaking at the TokenizeThis 2025 event, David highlighted issues such as restricted banking hours and the absence of non-USD trading pairs as key factors driving the demand for stablecoins. He noted that traditional banking hours of nine-to-five are insufficient for a 24-hour cryptocurrency market, thereby creating an environment ripe for innovation in yield-bearing stablecoins and payment systems that combine these features. The discussion also touched on Know Your Customer (KYC) regulations, where a panelist mentioned that holders of yield-bearing stablecoins would need to undergo KYC for tax purposes. David argued, however, that applying these regulations to everyday transactions, such as buying a coffee with stablecoins, may be excessive. The panel suggested exploring trust-based KYC systems to ease the burden on users who must currently navigate multiple KYC processes across different platforms.

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