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Given recent headlines, stablecoin supporters may disagree with the saying, “there’s no such thing as bad publicity.”

TerraUSA, an algorithmic stablecoin, imploded in May. This hurt the valuation of numerous cryptocurrencies and cast doubt on Tether’s ability to sustain its own $1 peg. Thus far, Tether has defied the skeptics.

Amid this tense environment, it’s interesting to revisit the January headlines speculating that PayPal was mulling introducing a stablecoin. According to company officials, the rumor was based on source code embedded in PayPal’s iPhone app, which was inadvertently left behind after an internal hackathon.

It’s difficult to envision PayPal taking on this challenge soon. Meta’s ill-fated stablecoin foray via Diem/Libra illustrates the hurdles facing such an endeavor, especially one undertaken by a tech giant.

At the same time, it’s important to speculate on how such an offering might impact the broader market over the long term. After starting its life as the first true digital financial services disruptor, PayPal could, ironically, find itself cast as an enabler of traditional market stability due to recent crypto market turmoil.

While a number of financial institutions remain cautious about cryptocurrency, many use the underlying technology for other purposes.

The up-and-down swings of digital assets, and an uncertain regulatory climate, have kept a fair share of banks and credit unions on the sidelines. At the same time, FIs have shown a willingness to embrace distributed ledger technology (DLT) ahead of the volatile crypto market.

Perspective matters when it comes to cryptocurrency.

The demise of the TerraUSD stablecoin has understandably spooked the markets. Any sudden freefall will panic people and make them wonder what’s next.

Investors, and FIs looking to offer crypto services, need to read between the lines and view this crash as an educational opportunity.

Many of you will remember the initial fear experienced when the Internet debuted in the 1990s. At the time, the popular narrative was that every business, no matter how big or small, would be on the information superhighway by the year 2000, replacing conventional media forms like newspapers, billboards, and the yellow pages. Fast forward nearly 30 years, and now everyone’s life is touched (and in many ways, sustained) by the Web.

The National Credit Union Association delivered an early gift to the institutions it regulates – guidance for handling digital assets such as cryptocurrency.

A growing number of credit unions have shown interest in offering crypto services to their members. Still, many have been reluctant to take the plunge without parameters from the NCUA. The agency’s guidance should provide some comfort for leery executives.

In our last blog post, several SRM experts weighed in on the future of banking in the now normal - how consumer spending behaviors would influence branch operations and non-interest lines of revenue. In this post, we will shift our focus to big data, cyber risks and the need to reinforce legacy infrastructure.