Crypto change Coinbase has pushed again in opposition to claims that the rise of stablecoins might 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 in search of greenback publicity.
- Two-thirds of stablecoin exercise occurs on DeFi platforms.
- Stablecoins strengthen, not weaken, the US greenback’s international function.
In a market notice shared Wednesday, Faryar Shirzad, Coinbase’s chief coverage officer, argued that the “stablecoins will destroy financial institution lending” narrative ignores how the market really capabilities.
“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 resembling cash market funds.
Stablecoin Demand Pushed by World Markets
In line with Coinbase, the vast majority of stablecoin customers are worldwide buyers in search of entry to the US greenback, not home savers.
In nations dealing with foreign money depreciation or restricted entry to banking, dollar-pegged stablecoins function a lifeline for the underbanked, offering stability and a bridge to international commerce.
The report famous that roughly two-thirds of all stablecoin transfers happen on decentralized finance (DeFi) and blockchain platforms, programs that function independently from conventional banks.
“They’re 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 risk “misreads the second,” arguing that they reinforce the greenback’s worldwide function slightly than compete with it.
The corporate mentioned US policymakers ought to see stablecoins as a strategic device for greenback enlargement, not as a threat to group banks or deposits.
“Neighborhood banks and stablecoin holders barely overlap,” Shirzad mentioned. “Actually, banks might enhance their companies 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. In the meantime, 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 in opposition to claims that trillions in stablecoin property would circulate out of US financial institution deposits, noting that any future progress would doubtless stay foreign-held or locked in digital settlement programs.
Even when international 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 prolong US financial affect whereas giving American monetary corporations a aggressive edge within the digital asset financial 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 programs.
Western Union to Launch Greenback-Backed Stablecoin on Solana
Western Union can be getting into the stablecoin market with plans to launch the US Greenback Cost Token (USDPT) on the Solana blockchain within the first half of 2026.
The token, issued by Anchorage Digital Financial institution, will enable customers to maneuver cash globally with decrease charges and sooner settlement occasions, decreasing reliance on conventional banking intermediaries and unstable foreign money conversions.
CEO Devin McGranahan described the transfer as a continuation of Western Union’s 175-year mission to simplify cash transfers, this time via 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 practically instantaneous and extra clear.
The submit Coinbase Dismisses Considerations That Stablecoins Threaten US Financial institution Deposits appeared first on Cryptonews.