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Tokenized bank deposits lack the flexibility and technical features of stablecoins, making them an inferior product, according to Omid Malekan.<\/p>\n
Banks and financial institutions have started experimenting with tokenized bank deposits, bank balances recorded on a blockchain, but the technology<\/a> is doomed to lose out to stablecoins, according to Omid Malekan, an adjunct professor at Columbia Business School.<\/p>\n Overcollateralized stablecoin issuers, who must maintain 1:1 cash or short-term cash equivalent reserves to back their tokens, are safer from a liability perspective than the fractional reserve banks that would issue tokenized bank deposits, Malekan said.\u00a0<\/p>\n Stablecoins are also composable, meaning they can be transferred across the crypto ecosystem and used in various app<\/a>lications, unlike tokenized deposits, which are permissioned, have know-your-customer (KYC) controls, and have restricted functionality.<\/p>\n Read more<\/p>\n<\/p>\n If you liked the article, do not forget to share it with your friends. Follow us on\u00a0Google News<\/a><\/span>\u00a0too, click on the star and choose us from your favorites.<\/span><\/strong><\/p><\/blockquote>\n If you want to read more News<\/a> articles, you can visit our General category.<\/a><\/span><\/strong><\/p>\n<\/blockquote>\n\n