Double game: Are banks for or against stablecoins?

​Against the backdrop of stablecoins’ rapid adoption in traditional finance, a conflict is taking shape. While banks, payment networks, and regulators are increasingly willing to integrate stablecoins as a payments tool, they are simultaneously trying to restrict them. In essence, the question is whether stablecoins can function not only as a settlement unit, but also as the foundation for interest-bearing deposit products.

The stablecoin integration trend

This week at the World Economic Forum in Davos, stablecoins emerged as a key topic in financial discussions, framed primarily as a payment and settlement instrument. Bank executives and regulators were no longer debating whether stablecoins are needed — the focus has shifted to how exactly they should be embedded into the financial system.

The actions of major banks support this shift. In 2025–2026, JPMorgan, Citi, and several European banks openly stated that they were working with stablecoins or tokenized deposits for interbank settlement, corporate payments, and liquidity management.

Payment networks are reinforcing this trend as well. Visa now enables banks in the US to settle transactions in USDC on weekends, while Mastercard is integrating stablecoins into its Multi-Token Network for commercial payments. Importantly, these solutions are designed specifically for banks and fintechs, not for the crypto community.

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At the same time, expectations for market growth are building. Circle CEO Jeremy Allaire called 40% annual growth in the stablecoin market a base-case scenario, assuming participation from banks, payment systems, and regulators. His key point is that stablecoins will not develop as a separate crypto market, but as shared financial infrastructure.

Why banks can no longer ignore stablecoins

Just a few years ago, banks openly distanced themselves from stablecoins, viewing them as part of the crypto market with elevated risks. But today, that stance has become practically untenable — not for ideological reasons, but for operational ones.

Stablecoins’ core advantage is 24/7 settlement without banking hours, clearing cycles, or delays. For corporate clients, cross-border transfers, and liquidity management, this means less trapped capital and lower operational costs. That is why banks have begun using stablecoins and tokenized deposits in internal and interbank processes, even if they publicly avoid the word “crypto.”

Another critical factor is access to an already established financial audience. Exchanges, traders, market makers, and fintech platforms have worked with stablecoins for years as a core settlement asset. For banks, this represents an existing payment flow and client base that is difficult to ignore without losing market share — especially in international transactions.

The conflict begins where yield appears

Even as banks grow more comfortable with stablecoins as a payment tool, the real conflict begins once yield enters the equation. As long as a stablecoin is used for transfers and settlement, it does not threaten the foundation of the banking model. But the moment it becomes a base for products that promise interest, it begins to compete directly with the bank deposit.

Recent developments in the US highlight this boundary clearly. The American Bankers Association (ABA), in its regulatory agenda, has been promoting the position that stablecoins should not generate yield for users and that profitability mechanisms should be limited. Such a ban is one of the ABA’s top priorities for 2026.

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From the banking perspective, this is not about terminology — it is about system balance. Retail and business deposits are a core source of liquidity that banks later transform into lending. If part of those funds starts flowing into yield-bearing stablecoin products outside the banking sector, banks lose cheap funding and must replace it with more expensive sources. The ABA estimates that stablecoin yield programs could lead to an outflow of up to $6 trillion in deposits from banks, reducing their capacity to provide credit.

The problem is exacerbated by the difference in terms for end users. In banks, dollar deposits typically offer low yields. In the US, the national average savings rate is around 0.61% APY, while one-year term deposits offer roughly 1.61%. A similar pattern exists elsewhere: foreign-currency deposits rarely provide high interest without additional conditions or higher risk, so they tend to function more as a preservation tool than a growth instrument. Against this backdrop, stablecoin “crypto deposits” offered through exchange programs and standalone platforms may deliver double-digit rates, sometimes approaching 20% annually.

Because of this stark difference, even users who are not interested in crypto as a market start viewing stablecoins as a way to hold dollars while earning extra yield. That is why the debate around CLARITY and GENIUS ultimately comes down to one question: will stablecoins remain primarily a payments instrument, or will they gain the right to function as an interest-bearing deposit product?

How the market could change if banks launch their own stablecoin products

The most likely way this conflict resolves is not that banks “defeat” crypto deposits — but rather that they try to adopt their logic in a regulated form. In 2025, Reuters reported that a group of ten major banks, including Bank of America, Deutsche Bank, Goldman Sachs, and UBS, was exploring the issuance of a stablecoin pegged to G7 currencies. In parallel, in the UK, the largest banks — including HSBC, NatWest, and Lloyds — have taken a different approach by testing tokenized deposits, essentially a “digital form” of regular bank money, issued under oversight and within the banking regulatory perimeter. For the market, this implies several outcomes.

First, a competitor to crypto deposits will emerge — one that feels psychologically comfortable for banks, because it does not push liquidity “outside,” but instead keeps it on the bank’s balance sheet or within a controlled environment.

Second, banks will be able to offer clients a familiar deposit product, but with some of the advantages of stablecoins — especially 24/7 availability and faster settlement — without handing that transaction flow over to exchanges.

Third, the double-digit yields that currently make crypto deposits so attractive could evolve into a two-speed market: “bank-issued” digital money with lower yields but higher predictability, and “non-bank” crypto deposits with higher returns but greater platform and business-model risk.

In this context, scale becomes a key question. Citi notes that if the financial sector prioritizes tokenized deposits and bank-issued tokens, these instruments could capture larger transaction volumes than traditional stablecoins — simply because they integrate more easily into existing banking rules. As a result, the end of this story is less about banning stablecoins, and more about separating functions. Stablecoins will consolidate their role as a settlement and payments instrument, while banks will try to formalize yield as their own product within a regulated model.