Stablecoins vs Tokenised Deposits: Bank-led ‘Rhino’ Set to Challenge Stablecoins
Bank of England policymaker Megan Greene says tokenised deposits could overtake stablecoins within five years, using the “tortoise, hare and rhino” analogy. She argues stablecoins may lose momentum despite their decade-long growth, because tokenised deposits could replicate stablecoins’ speed and programmability while keeping money inside the regulated banking system.
Tokenised deposits are described as blockchain-represented commercial bank deposits that remain on bank balance sheets and continue to support lending within existing regulation. The key market implication: stablecoins face competition for deposit-like funds and related revenues, while banks gain a pathway to adopt some blockchain benefits without changing the core financial institutions.
The article also highlights why stablecoins matter beyond payments—especially in countries with weak currencies and capital controls (examples cited include Nigeria and Argentina). Stablecoins are presented as a gateway to self-custody and public blockchain ecosystems, supporting broader adoption of crypto, particularly Bitcoin.
Regulatory context is used to explain differing futures: the US (GENIUS Act) supports regulated private stablecoins and deprioritizes retail CBDCs, while the EU (MiCA) imposes strict licensing and reserve requirements. The UK is positioned between these approaches.
Bottom line for traders: stablecoins may shift from “dominant digital dollar layer” toward more segmented use cases, while tokenised deposits gain traction in regulated rails. Stablecoins remain important for liquidity, cross-border flows, and on-chain access, with potential spillover effects into BTC activity.
Neutral
The article is fundamentally a policy-and-ecosystem argument, not a direct product shock. Greene’s claim that tokenised deposits could overtake stablecoins within five years is bearish for stablecoins’ long-term “dominant layer” narrative, but it is not an outright negative for the crypto market because stablecoins are framed as still essential for cross-border access, self-custody onboarding, and public-chain liquidity.
Historically, when regulation or “rails” narratives shift (e.g., periods of tighter stablecoin oversight in the US/EU, or discussions around CBDCs), markets usually react in two phases: (1) short-term volatility in stablecoin-related volumes/deals and (2) longer-term adaptation where stablecoins remain liquid primitives while institutions adjust their distribution and compliance. Here, the mention of regulated stablecoin frameworks (GENIUS Act) and MiCA reserve/licensing rules suggests steady integration rather than collapse.
For traders, the most tradable implication is likely relative allocation: stablecoins may experience slower growth and more competition from bank-led on-chain deposits, while BTC could still benefit indirectly as stablecoin-driven access funnels users into broader crypto ecosystems. Net effect: neutral.
Short term: likely neutral-to-slight rotation risk away from stablecoin “growth” expectations. Long term: if banks scale tokenised deposits, stablecoins’ market share by use case may change, but stablecoins can coexist and remain relevant for public-chain rails and emerging-market savings.