TL;DR
- 60.2% of U.S. community banks believe stablecoins could trigger deposit outflows and reduce their lending capacity.
- A CSBS survey polled 330 institutions across 35 states between April and July; less than 1% currently offers stablecoin services.
- The GENIUS Act, signed in July 2025, will establish a federal framework for stablecoin issuers and is expected to take effect in 2027.
The majority of community banks in the United States view the rise of stablecoins with concern over their impact on the traditional financial system. That is the finding of a new survey by the Conference of State Bank Supervisors (CSBS), which polled 330 institutions across 35 states between April and July 2025.
The survey found that 60.2% of respondents considered potential deposit outflows and the resulting reduction in lending capacity to be a “high-impact” or “moderate-impact” effect associated with the growth of the stablecoin market.
The concern stems from the fact that large issuers of these digital currencies tend to hold their reserves at larger-scale banks, diverting funds away from community institutions that rely on those deposits to finance local loans.
Community Banks and a Market Moving Without Them
Despite the widespread unease, adoption within these institutions is practically nonexistent. Less than 1% of respondents said they currently offer stablecoin-related services, and most have no plans to add them in the next twelve months. However, around 16% indicated they expect to launch stablecoin services within the coming year, while 17.5% plan to introduce tokenized deposits and 12% intend to add cryptocurrency services more broadly.
It is worth noting that the GENIUS Act, enacted in July 2025, will establish a federal framework for stablecoin issuers and is expected to take effect in early 2027. Among the leading players in the sector are Tether, Circle, Paxos, Ripple, and Sky.
Last month, the White House published an analysis concluding that banning yield on stablecoins would have a marginal effect on bank lending: it would add just $2.1 billion to total loan volume, equivalent to 0.02% of the current outstanding amount, with community banks absorbing around $500 million of that increase.
