I wonder what this will do to crypto - my guess is that it will result in a lot more crypto trades and be bad for crypto exchanges
Many institutions want to trade crypto but don't want or can't use the crypto financial system without a lot of effort. If they can buy coins and use the same (trusted, separated, and audited) exchange, clearing, and custodian systems they use for other trades then crypto trades can be added with little compliance effort.
If retail traders can buy and sell bitcoin using their existing retail broker they'll do so rather than open accounts on a crypto exchange.
A USD tethered coin offered by a major institution that used this would likely kill tether etc.
Many institutions want to trade crypto but don't want or can't use the crypto financial system without a lot of effort. If they can buy coins and use the same (trusted, separated, and audited) exchange, clearing, and custodian systems they use for other trades then crypto trades can be added with little compliance effort.
If retail traders can buy and sell bitcoin using their existing retail broker they'll do so rather than open accounts on a crypto exchange.
A USD tethered coin offered by a major institution that used this would likely kill tether etc.