Why are stablecoins becoming more popular?

By Christopher Tepedino, CoinTelegraph; Compiler: Deng Tong, Golden Finance

According to Jerald David, president of Arca Labs, the popularity of stablecoins stems from the constraints of the U.S. financial system – in particular, limited banking hours and the lack of non-USD trading pairs. **

"So we started thinking about why and started talking about 9-to-5 banking hours," David said during a panel discussion at the TokenizeThis 2025 event on April 16.

The focus of the panel discussion was yield coins, or essentially the rise of cryptocurrencies that, like stablecoins, can generate yield by holding, staking, or borrowing.

"Well, 9-to-5 banking hours don't work, right? There are implementations of payment systems that are on the horizon that combine yield instruments and stablecoins," David said.

According to David, the demand for stablecoins stems from the inability of traditional banking infrastructure in the United States to support round-the-clock transactions. **"This industry is known to be a 24-hour non-stop industry. ”

KYC verification for stablecoins

The "Know Your Customer" (KYC) process was an important topic in this panel discussion. According to a representative from Figure Markets, KYC verification is mandatory for all holdings of yield stablecoins for tax reasons. **

But David points out that stablecoins have many other uses besides generating yields, including payments. "There is no need for anti-money laundering (AML) or KYC verification to buy a cup of coffee with this stablecoin."

Nick Carmi, head of exchanges at Figure Markets, suggested that part of the solution could be a trust-based KYC system that allows users to carry credentials across platforms. KYC is a process used by financial institutions to verify the identity of users. It aims to prevent fraud, money laundering, and other illegal activities by ensuring that a user's identity matches who they claim to be.

Currently, users have to complete KYC checks separately for each financial institution or service they use, which creates friction and frustration – especially for those browsing multiple platforms or exploring different crypto ecosystems.