Stablecoins have gained popularity due to the constraints of the US financial system, including restricted banking hours and the absence of non-USD trading pairs, as discussed by Jerald David, president of Arca Labs, at the TokenizeThis 2025 event. David emphasized that the traditional US banking infrastructure does not accommodate 24-hour transactions, which is essential for the cryptocurrency sector. This has fostered the rise of yield-bearing stablecoins that can generate returns through mechanisms like holding, staking, or lending. The event also highlighted the challenges of Know Your Customer (KYC) procedures in relation to yield-bearing stablecoins, suggesting that everyday transactions should not require extensive KYC processes. The panelists discussed the potential for a trust-based KYC system that would facilitate smoother user experiences across platforms without the need for repetitive identity verification. Overall, the discussion marked a significant exploration of how stablecoins are becoming integral in addressing banking limitations while ensuring compliance with regulatory frameworks.

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