Coinbase Refutes Banks’ Stablecoin Deposit Drain Worries
Coinbase has challenged major US banking groups’ claims that stablecoins could drain deposits and threaten lending. Its policy chief, Faryar Shirzad, argues stablecoins are used primarily for payments and cross-border transfers. He stresses that demand mainly comes from international users seeking dollar exposure, not US retail customers. According to Coinbase, about two-thirds of stablecoin transfers occur on DeFi or blockchain platforms, operating parallel to traditional banking rather than competing directly.
US commercial bank deposits exceed $18 trillion, while global stablecoin circulation is capped around $5 trillion, mostly held offshore. The report also highlights minimal overlap between community bank customers and stablecoin users, suggesting banks could integrate stablecoins to enhance services. Following the GENIUS Act rollout, several institutions are already exploring or launching stablecoin offerings.
By reframing stablecoins as complementary to the banking system, Coinbase aims to ease regulatory concerns. Growing stablecoin adoption is seen as reinforcing the dollar’s global dominance rather than undermining banks. For traders, this clarification of stablecoins’ role could support continued growth in digital asset markets.
Neutral
This news is likely to have a neutral impact on stablecoin prices. In the short term, Coinbase’s rebuttal may reduce regulatory uncertainty and calm market fears, but it does not introduce an immediate catalyst for price spikes. In the long term, clarifying stablecoins’ role as complementary to traditional banking and highlighting growing adoption by financial institutions could support broader demand and infrastructure development, creating a modest positive backdrop without drastic price moves.