Stablecoins are seen as a potential disruption in banking, offering core services like storage and transfer of money, unlike banks that bundle various financial services. This unbundling could threaten legacy banks that depend on deposits for funding, as stablecoins transform money into efficient and portable software. However, the issuance of stablecoins comes with risks, such as intense competition, profitability concerns, and uncertain regulatory frameworks. Companies like Circle face high operating costs, suggesting they may have to use stablecoins as loss leaders while offering additional services to remain competitive, potentially leading to a re-bundling of services. This trend resembles historical patterns in tech, where startups that disrupt eventually return to bundling as they grow. Regulations might also push stablecoin issuers towards bank-like models, prompting them to obtain banking licenses. Ultimately, while stablecoins aim to revolutionize banking, they may inadvertently duplicate aspects of traditional banking as they seek profitability.

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