Coinbase Dismisses Concerns That Stablecoins Threaten US Bank Deposits
Crypto change Coinbase has pushed again towards claims that the rise of stablecoins may drain deposits from US banks or undermine conventional lending.
Key Takeaways:
- Coinbase says stablecoins don’t threaten US banks, arguing most demand comes from worldwide customers searching for greenback publicity.
- Two-thirds of stablecoin exercise occurs on DeFi platforms.
- Stablecoins strengthen, not weaken, the US greenback’s world position.
In a market note shared Wednesday, Faryar Shirzad, Coinbase’s chief coverage officer, argued that the “stablecoins will destroy financial institution lending” narrative ignores how the market truly features.
“Most stablecoin demand comes from outdoors the US, increasing greenback dominance globally, not competing along with your native financial institution,” Shirzad mentioned, including that issues echo misplaced fears raised throughout earlier monetary improvements akin to cash market funds.
Stablecoin Demand Driven by Global Markets
According to Coinbase, the vast majority of stablecoin customers are worldwide traders searching for entry to the US greenback, not home savers.
In nations dealing with forex depreciation or restricted entry to banking, dollar-pegged stablecoins function a lifeline for the underbanked, offering stability and a bridge to world commerce.
The report famous that roughly two-thirds of all stablecoin transfers happen on decentralized finance (DeFi) and blockchain platforms, methods that function independently from conventional banks.
“They are the transactional plumbing of a brand new monetary layer that runs parallel to, however largely outdoors, the home banking system,” the agency mentioned.
Shirzad emphasised that treating stablecoins as a menace “misreads the second,” arguing that they reinforce the greenback’s worldwide position fairly than compete with it.
The firm mentioned US policymakers ought to see stablecoins as a strategic instrument for greenback growth, not as a danger to neighborhood banks or deposits.
“Community banks and stablecoin holders barely overlap,” Shirzad mentioned. “In truth, banks may enhance their providers with stablecoins.”
The “stablecoins will destroy financial institution lending” narrative ignores actuality. U.S. banks are sitting on trillions in reserves—they’ve loads of liquidity. Meanwhile, most stablecoin demand comes from outdoors the U.S., increasing greenback dominance globally, not competing along with your native… pic.twitter.com/3wCOEm6Zr0
— Faryar Shirzad
(@faryarshirzad) October 29, 2025
Coinbase additionally pushed again towards claims that trillions in stablecoin belongings would stream out of US financial institution deposits, noting that any future progress would doubtless stay foreign-held or locked in digital settlement methods.
Even if world stablecoin circulation reached $5 trillion, Coinbase estimates the bulk would sit outdoors the US, with little impact on home deposits, which at the moment exceed $18 trillion.
The agency argues that, if something, stablecoins will lengthen US financial affect whereas giving American monetary companies a aggressive edge within the digital asset economic system.
The protection comes as extra banks discover stablecoin merchandise following the passage of the GENIUS Act, the US regulatory framework governing stablecoin issuers and cost methods.
Western Union to Launch Dollar-Backed Stablecoin on Solana
Western Union can be getting into the stablecoin market with plans to launch the US Dollar Payment Token (USDPT) on the Solana blockchain within the first half of 2026.
The token, issued by Anchorage Digital Bank, will permit customers to maneuver cash globally with decrease charges and quicker settlement occasions, decreasing reliance on conventional banking intermediaries and risky forex conversions.
CEO Devin McGranahan described the transfer as a continuation of Western Union’s 175-year mission to simplify cash transfers, this time by blockchain know-how.
He mentioned Solana was chosen for its pace, scalability, and low-cost transactions, that are essential for the corporate’s high-volume remittance enterprise.
By leveraging blockchain rails, Western Union goals to make remittances almost instantaneous and extra clear.
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