TLDR
- Coinbase says stablecoins boost, not drain, US banking stability.
- Stablecoins thrive abroad, powering dollar access and fintech growth.
- Coinbase: Global stablecoin use strengthens, not weakens, the dollar.
- Banks warned of risks, but Coinbase calls stablecoins complementary.
- Global firms race to issue stablecoins, reshaping cross-border finance.
Coinbase dismissed banking sector warnings about stablecoin risks, stating stablecoin demand is driven by global markets, not domestic banks. The exchange emphasized that stablecoins support the dollar’s global use rather than pulling deposits from US financial institutions. It also stated that stablecoin systems operate separately from traditional banking and do not affect deposit levels meaningfully.
Global Use of Stablecoins Shifts Narrative
Coinbase highlighted that stablecoin adoption is concentrated in emerging markets, where people seek dollar-backed stability and faster financial access. The report noted that stablecoin demand mainly arises from users outside the United States, seeking alternatives to unstable local currencies. Therefore, the company argued that stablecoins enhance, not threaten, the reach of the US dollar.
Coinbase’s findings show that stablecoins act as vital infrastructure for blockchain-based systems and digital commerce across global networks. The company noted that most stablecoin transfers occur on decentralized platforms that are not linked to domestic financial systems. As a result, the firm claimed that stablecoins have minimal overlap with community banking.
Coinbase emphasized that stablecoin platforms operate as independent financial rails, enabling programmable, borderless, and real-time settlements. It insisted that banks could integrate stablecoins into their payment systems rather than oppose them. Consequently, the company dismissed claims that stablecoins drain liquidity or destabilize banks.
Banks Express Concerns Over Yield and Deposits
US banking groups have warned that stablecoins could attract deposits away from banks, especially if stablecoin products offer returns. Coinbase stated that the GENIUS Act already limits interest payments on stablecoins used for direct payments. The exchange clarified that yield-based stablecoins operate under DeFi systems, not within bank-like frameworks.
A recent Treasury study warned of potential outflows exceeding $6 trillion if stablecoins offered universal interest. Coinbase downplayed these estimates, stating that most stablecoin volume remains abroad or locked in digital systems. The report emphasized that stablecoin users rarely overlap with community bank customers.
Coinbase argued that stablecoins should not be viewed as replacements for banks but rather as complementary tools. According to the report, stablecoin usage in the US remains minor compared to its international footprint. Therefore, the company concluded that concerns over large-scale deposit flight are exaggerated and unsupported.
New Entrants Signal Stablecoin Market Growth
South Korea’s BDACS announced plans to launch a won-backed stablecoin named KRW1 on Circle’s Arc blockchain. This move aligns with the trend of national issuers entering the stablecoin space to support international settlements. With more governments and institutions launching blockchain-based tokens, the global stablecoin ecosystem continues to expand.
Western Union also disclosed plans to launch a US dollar-backed stablecoin on the Solana blockchain by 2026. The firm cited faster remittance services and reduced currency conversion costs as key reasons for entering the stablecoin space. This development highlights how traditional financial institutions are adopting blockchain to modernize cross-border transactions.
Coinbase’s report emphasized that stablecoins represent a forward step in digital finance, rather than a disruption to banking. The company stated that by enabling faster, cheaper, and programmable transactions, stablecoins drive innovation and reinforce the US monetary system’s strength globally. It concluded that stablecoins should be embraced as a strategic tool in the digital economy.
