T. Rowe Price PM touts ‘big potential’ of stablecoins
Tech fund portfolio manager Dominic Rizzo calls stablecoins “the most obvious use case for crypto”
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A tech fund portfolio manager at T. Rowe Price is keeping an eye on crypto, noting that the benefit of stablecoins is bringing more attention to the space.
Dominic Rizzo, who leads the financial giant’s global technology equity strategy, called stablecoins “the most obvious use case for crypto” at the Exchange ETF conference Tuesday. They clearly have “big, big potential,” he added.
The comments may prove timely, given the stablecoin headlines we’ve seen over the past week. We heard about World Liberty Financial’s USD1 and that Fidelity is reportedly exploring its own stablecoin launch.
Just this morning, New York Stock Exchange parent company Intercontinental Exchange said it’s looking into using Circle stablecoin USDC (and its tokenized money market fund, USYC) to develop products for customers.
It’s important to be thoughtful about where it makes sense to use DeFi vs. TradFi, Rizzo told me.
“Pound to USD conversion — where you have bank accounts on either side of the pond — is actually a really cheap transaction, and probably not the best use case for stablecoins,” he said. “Stablecoins into different countries that might not have that same level of FX liquidity may make a lot more sense.”
Also invaluable is using them to move between fiat currencies and crypto assets, he added.
Stablecoins are just one of many use cases for crypto, Rizzo believes. He considers bitcoin a “productivity-enhancing technology” — and while it is susceptible to bubbles, Rizzo said he owns some nevertheless.
In the T. Rowe tech ETF that Rizzo manages (just equities), crypto exposure is limited to Coinbase and Robinhood for now. He struggles with the premium to NAV that MSTR trades at and what he considers to be a lack of differentiation among bitcoin miners.
Rizzo didn’t want to name private companies to which he would be interested in allocating, if and when a crypto IPO boom occurs.
But based on his belief in stablecoins, Circle seems like a clear choice.
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