TL;DR
- Coinbase has rejected warnings that stablecoins weaken the US banking system, stressing that most transactions take place abroad and strengthen the global role of the dollar.
- The company argued that stablecoins function as payment tools, not as substitutes for savings accounts.
- Industry voices say that instead of fighting innovation, US banks should modernize their offerings to compete in a digital-first financial era.
Coinbase has dismissed recent claims suggesting stablecoins are draining deposits from American banks, calling such fears exaggerated and misleading. The exchange argued that stablecoins are primarily used for payments and remittances rather than as alternatives to traditional savings products. According to Coinbase, this distinction undercuts the idea that widespread adoption of dollar-pegged tokens is destabilizing the credit system.
The company also challenged data presented in government reports that predict trillions of dollars in deposit flight linked to stablecoins. It highlighted inconsistencies, noting that projected market size estimates for stablecoins are far smaller than the supposed risk outlined by regulators. Coinbase framed this as evidence of flawed assumptions rather than credible risk assessment.
Stablecoin Growth Expands Dollar Influence Abroad
Coinbase emphasized that most stablecoin activity takes place outside the United States, especially in regions where financial infrastructure is underdeveloped. By providing faster and cheaper digital payments, stablecoins have become an attractive alternative for businesses and individuals seeking efficient settlement methods. The International Monetary Fund estimates that more than half of the two trillion dollars in stablecoin transactions recorded in 2024 occurred in markets such as Latin America, Africa and Asia.
Far from threatening US credit conditions, Coinbase argued, this dynamic reinforces global demand for dollar-backed assets. Because leading stablecoins are overwhelmingly tied to the US dollar, their international adoption effectively expands dollar dominance without displacing deposits in American banks.
Banks Face Pressure To Modernize
Industry analysts note that the banking sector’s anxiety over stablecoins stems more from competition than from genuine systemic risk. Matt Hougan, chief investment officer at Bitwise, recently argued that banks should focus on offering better yields and services rather than lobbying against crypto-based alternatives. For years, depositors have received low interest returns while banks profited from fees and lending spreads.
With the approval of the GENIUS Act earlier this year, which establishes a clearer framework for stablecoin issuers, optimism in digital asset markets has risen. Crypto industry groups continue to urge lawmakers to avoid imposing unnecessary restrictions that could slow innovation. Coinbase and other advocates maintain that well-regulated stablecoins can coexist with banks, expand financial access worldwide, and strengthen the role of the dollar in global trade.
