Interactive Brokers, one of the largest discount brokerages in the world, is exploring the possibility of launching its own stablecoin for customers. This move would mark a significant step for the firm into the world of cryptocurrency, as reported by Reuters on July 28.
Founder Thomas Peterffy revealed in an interview that the company is currently in the process of considering the issuance of stablecoins, although a final decision on the structure and rollout has not yet been made. In addition to this, Interactive Brokers is also looking into offering instant, round-the-clock stablecoin funding for brokerage accounts and supporting asset transfers in commonly traded cryptocurrencies.
With a valuation of approximately $110 billion, Interactive Brokers already provides crypto trading services through partnerships with Paxos and Zero Hash. One potential option being considered is allowing customers to fund their accounts with stablecoins issued by other financial institutions, provided that the credibility of the issuer is established.
Despite the growing demand for cryptocurrencies among clients, Peterffy remains cautious and skeptical about their fundamental value. He stated, “It’s basically hard to grasp its fundamental value. If we see people adopting it and ascribing a value to it, I’m okay with that, but I’m still not convinced.”
Stablecoins are digital tokens designed to maintain a stable value pegged to a fiat currency, such as the US dollar. They are commonly used for cross-border transactions without relying on traditional banking systems.
In a competitive landscape, Interactive Brokers’ rival Robinhood introduced the Global Dollar Network last year, centered around USDG, a dollar-pegged stablecoin issued by Paxos. This highlights the trend of large retail platforms incorporating stablecoin infrastructure into their core brokerage services.
Interactive Brokers has also ventured into adjacent markets with products like ForecastEx, a prediction market allowing investors to trade contracts tied to specific questions. This diversification serves as a hedge against potential disruptions to the firm’s core equities, futures, options, and crypto offerings.
As of June, Interactive Brokers reported a significant increase in customer accounts, up 32% from the previous year, amidst heightened trading activity driven by policy-induced volatility. The company’s shares have outperformed the sector index, with analysts at Morningstar citing the predictions market and crypto services as an effective hedge for the business.
Overall, Interactive Brokers’ potential entry into the stablecoin market signals a strategic move to adapt to evolving trends in the financial industry and provide additional value-added services to its clientele.