Banks Eye Ethereum for Stablecoin Infrastructure 51% of Stablecoins Run on Ethereum

Banks are increasingly acknowledging the potential of Ethereum as a cornerstone of the future financial infrastructure. Tom Lee, a prominent investor and co-founder of Fundstrat, predicts that banks will soon start acquiring Ethereum to support their stablecoins. This shift is driven by the growing demand for stablecoins, which are increasingly being adopted by both consumers and large institutions. Over 51% of stablecoins currently run on the Ethereum network, making it the backbone of the stablecoin ecosystem.

Lee envisions that this trend will lead to institutional-level accumulation of Ethereum, similar to MicroStrategy’s investments in Bitcoin. He believes that by 2025, the financial sector and the cryptocurrency world will be fully intertwined, with stablecoins playing a key role in this convergence. Banks will invest in Ethereum to ensure the security of the network, contributing to its stability by staking Ethereum. This process involves locking up ETH to validate transactions and earn rewards, which is crucial for the security of stablecoins within the Ethereum network, which operates on a Proof-of-Stake (PoS) model.

Currently, Ethereum hosts 51% of stablecoins, and 30% of network fees come from stablecoin transactions. Lee anticipates that as the stablecoin market grows, the dominance of the US dollar in global finance will increase. If the stablecoin market expands from $250 billion to $2 trillion, transaction fees and returns on the Ethereum network will also rise exponentially. This growth will further solidify Ethereum's position as a critical component of the future banking infrastructure.

In line with this strategy, Bitmine Immersion, a company led by Lee, has launched a $250 million private investment round. The funds raised will be used to purchase Ethereum. Investors in this round include leading institutions from both traditional finance and the crypto sector. The company’s strategy will be evaluated based on the amount of Ethereum earned per share. Over time, the company’s value is expected to increase through methods such as generating returns by staking Ethereum, financing transactions with ETH in hand, and the potential increase in the price of Ethereum.

This shift towards Ethereum by banks is not just about speculation but about enhancing their infrastructure. By acquiring Ethereum, banks can ensure the security and stability of their stablecoins, which are becoming an integral part of the financial system. This move highlights a broader trend in the financial sector, where institutions are increasingly recognizing the utility of cryptocurrencies beyond mere investment opportunities. As the integration of cryptocurrencies into traditional finance continues, Ethereum is poised to play a pivotal role in shaping the future of the financial infrastructure.