- Former Citi architect Tony McLaughlin launches Ubyx, a network to enable direct stablecoin-to-bank account transfers without crypto exchanges.
- The service addresses stablecoin weaknesses including price volatility and financial stability concerns, potentially serving as a public good.
- Current proposed fee structure of 2.7% for redemption raises questions about competitiveness against crypto exchanges that offer lower costs.
Former Citi architect Tony McLaughlin has officially launched Ubyx, a venture aimed at creating a network connecting banks and fintechs for direct stablecoin redemptions into bank accounts. The platform, which went live following McLaughlin’s completed gardening leave, addresses a critical gap in stablecoin infrastructure by enabling seamless conversion between traditional banking and digital currencies.
McLaughlin, who previously developed Citi’s Regulated Liability Network for tokenized deposits, has identified a key challenge in the current stablecoin ecosystem. While recent acquisitions in the space—Stripe‘s $1.1 billion purchase of Bridge and MoonPay’s acquisition of Iron—have enhanced the API infrastructure for businesses using stablecoins, the final step of converting these digital assets back to traditional banking remains cumbersome.
The current redemption process typically requires recipients to register with crypto exchanges before converting their stablecoins to bank deposits. Ubyx aims to eliminate this friction by creating direct pathways from stablecoins to bank accounts, functioning similarly to card networks like VISA and Mastercard or remittance services like Western Union.
The platform addresses several weaknesses in the stablecoin ecosystem. By making off-ramping more accessible, Ubyx could help stabilize stablecoin prices and maintain monetary “singleness”—though this closer connection between banks and crypto could intensify risk transmission during crises. To counter this concern, the platform plans to establish a lending facility operated through a decentralized autonomous organization (DAO).
Ubyx may also help sustain smaller stablecoins by reducing the importance of which specific stablecoin is received. This could preserve competition and prevent monopolistic behaviors, potentially serving a broader public good by maintaining diversity in the ecosystem.
While the concept shows promise, Ubyx’s proposed fee structure raises questions about competitiveness. The platform suggests a 1% redemption fee plus another 1% for foreign exchange, with Ubyx taking 0.2% and stablecoin issuers 0.5%. This results in potential consumer costs of 2.7%—comparable to traditional card fees rather than the cost efficiency stablecoins typically promise.
This fee structure may struggle against crypto exchanges that currently offer inexpensive off-ramping services and competitive foreign exchange rates. Alternative solutions exist, such as newer stablecoins like M stablecoin and Global Dollar that share reserve revenue with distribution partners.
Ubyx could potentially influence the stablecoin market by offering a dual model: standard fees for traditional stablecoins or reduced fees for those that share revenue. This approach might accelerate adoption of revenue-sharing models that benefit consumers through lower costs.
As stablecoin usage for cross-border payments continues to grow, Ubyx’s innovative approach could reshape how digital assets interact with traditional banking—provided the economic incentives align for all participants in the ecosystem.
You can learn more about this new venture at Ubyx.
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