Banks Fear Stablecoins as Disruptors, Not as Doomsday Tools

Coinbase has challenged the assertion by some U.S. banks that stablecoins pose a systemic threat to the financial system, arguing instead that these claims are more about protecting existing revenue streams than addressing genuine risks. Faryar Shirzad, Coinbase’s chief policy officer, emphasized in a recent blog post that there is no significant evidence linking stablecoin adoption to a mass outflow of bank deposits. This stance is supported by the fact that major banks still hold substantial reserves at the Federal Reserve, suggesting that deposit risks—if real—would likely prompt more aggressive efforts to attract customer funds.

According to Shirzad, the core issue lies in how stablecoins are disrupting traditional financial models, particularly in the payments sector. These digital tokens, pegged to real-world assets like the U.S. dollar, offer faster and more cost-effective transaction methods than traditional banking systems. This innovation threatens an estimated $187 billion in annual swipe-fee revenue for traditional card networks and banks. Shirzad likened the current resistance to stablecoins to the backlash faced by ATMs and online banking in earlier decades, where banks similarly warned of systemic risks to protect entrenched profits.

The debate also extends beyond the U.S. In the U.K., the Bank of England is reportedly considering caps on how much of a “systemic” stablecoin individuals and businesses can hold. These measures aim to prevent sudden outflows of deposits that could destabilize the financial system. Officials define systemic stablecoins as those already widely used for U.K. payments or expected to gain popularity, with thresholds as low as £10,000 for individuals and £10 million for businesses.

Despite the concerns raised by regulators and traditional financial institutions, the adoption of stablecoins continues to accelerate. A June 2025 report from Coinbase revealed that stablecoin transaction volume in 2024 reached $27.6 trillion, surpassing the combined transaction volume of Visa and Mastercard ($7.68 trillion). The report also predicts 2025 will be a breakthrough year for stablecoins, reinforcing their role as a key financial driver. This growth is supported by major banks and financial institutions entering or expanding their presence in the stablecoin market, including JPMorgan Chase, Bank of America, and Société Générale.

Banks are increasingly viewing stablecoins not as a threat but as a tool to improve efficiency and competitiveness. For instance, JPMorgan Chase has launched its JPM Coin and recently introduced a new deposit token on Coinbase’s Base network. These initiatives aim to streamline cross-border payments and reduce correspondent banking costs while offering round-the-clock access to digital transactions. Similar efforts by Société Générale and ANZ Bank highlight how stablecoins are being integrated into institutional finance to enhance liquidity and settlement capabilities.

The regulatory landscape is also evolving to support stablecoin adoption. In the U.S., the Senate passed the GENIUS Act, a framework aimed at providing clarity and consumer protections for stablecoin issuers. In the EU, the Markets in Crypto-Assets (MiCA) regulation has already established a comprehensive legal framework for stablecoins, with Société Générale’s EURCV serving as a model for compliance. These developments signal a growing acceptance of stablecoins as part of the broader financial ecosystem.

Shirzad urged banks to embrace stablecoin technology rather than resist it, arguing that those willing to adapt stand to benefit from the shift. Stablecoins can cut settlement times, reduce correspondent banking costs, and enable 24/7 access to digital payments. This transition, he said, mirrors broader technological shifts in finance that have historically favored institutions that innovate rather than resist change.

As the stablecoin market matures, its primary use case continues to evolve from speculative trading to real-world applications such as cross-border payments, supply chain finance, and digital asset settlements. In 2025, USDT and USDC together account for more than 70% of the stablecoin market, with trillions of dollars in annual transaction volume. The shift reflects a broader cultural change, with users increasingly viewing stablecoins as everyday money rather than just crypto tools.