Banks Embrace Stablecoins as Financial Infrastructure of the Future

Coinbase has challenged the notion that stablecoins drain bank deposits, labeling it a "myth." According to recent developments and regulatory changes, stablecoins are increasingly being integrated into traditional financial systems and are not necessarily drawing funds away from banks. This assertion is supported by the fact that major banks are launching their own stablecoins and exploring digital currency initiatives, driven by evolving regulatory frameworks and growing customer demand.

The banking industry is undergoing a digital transformation, with financial institutions recognizing the potential of stablecoins to revolutionize payments, cross-border transactions, and institutional finance. Ten major banks have already launched stablecoins, including JPMorgan Chase (JPM Coin and JPMD), Société Générale (EURCV), and ANZ Bank (A$DC). These stablecoins are designed to maintain a stable value pegged to fiat currencies and are often fully backed by reserves held at regulated financial institutions.

The regulatory landscape is also evolving to support this transition. The pending GENIUS Act in the United States and the EU’s MiCA regulations provide frameworks for bank-issued stablecoins. These regulations aim to ensure that stablecoins are backed by adequate reserves and are subject to regular audits and compliance checks. For instance, Société Générale's EURCV is fully compliant with the EU’s MiCA regulations, which came into effect in July 2024.

Despite these advancements, challenges remain. Regulatory uncertainty persists in some markets, and technical hurdles such as blockchain integration with existing infrastructure and ensuring security and custody of digital assets are still significant. However, the success of early adopters like JPMorgan Chase, Société Générale, and ANZ Bank demonstrates the viability and benefits of bank-issued stablecoins.

The potential impact of stablecoins on the global payments landscape is significant. With the ability to facilitate faster, cheaper, and more transparent transactions, stablecoins are addressing long-standing issues in traditional payment systems. For example, ANZ Bank has successfully executed transactions using its A$DC stablecoin, and is exploring innovative applications such as using stablecoins for pension contributions.

Financial institutions are also beginning to prepare for the adoption of stablecoins. This includes acquiring talent with expertise in blockchain technology and digital assets, building technological capabilities, and engaging with regulators to navigate the evolving landscape. The GENIUS Act, which was signed into law by President Donald Trump on July 18, 2025, sets a precedent for U.S. stablecoin regulation, requiring that stablecoin issuers maintain 1:1 reserves and comply with anti-money laundering (AML) and know-your-customer (KYC) regulations.

The future of stablecoins is promising, with projections indicating that the market could grow to $500 billion by 2028, according to JPMorgan. This growth is driven by regulatory clarity, increased institutional confidence, and the expansion of use cases beyond crypto trading to real-world applications such as cross-border payments and supply chain finance. As more institutions join the movement and regulatory clarity improves, bank stablecoins are likely to become essential infrastructure for the future of finance.

In summary, the integration of stablecoins into traditional financial systems is reshaping the landscape of global payments. While challenges remain, the progress made by major banks and the evolving regulatory framework suggest that stablecoins are here to stay and will play a pivotal role in the future of finance.