Introduction to Stable Coins and Their Impact on Banks
Stable coins have quickly become a key application for crypto, with banks and traditional financial institutions taking notice. According to recent data from Cryptoquant, the total value of StableCoin holdings on crypto exchanges reached an all-time high of $68 billion on August 22, 2025. Additionally, the global market capitalization of stablecoins is estimated to be over $280 billion.
The growth of stable coins is helping the crypto sector mature, but banks are expressing concerns. The Financial Times reported that banks are pushing to change new US StableCoin rules due to the uncertainty of the drains of trillion dollars. Banks have also noted the Genius Act, which prohibits the issuer from paying customers interest on the use of stable coins.
Are Stable Coins Good for Crypto but Bad for Banks?
Charles Wayn, co-founder of Web3 Growth Platform Galxe, believes that the growth of stable coins is a main concern for banks. “Users enter their stable coins on a crypto exchange and deserve a superior return for what is available on traditional bank accounts,” said Wayn. However, James Smith, co-founder of the Digital Asset Platform Elliptic, pointed out that banks still have some advantages over crypto exchanges when it comes to stable coins.
“Krypto exchanges do not offer the same protection as FDIC insurance, so banks still have an advantage in terms of public perception,” said Smith. Additionally, Smith noted that jurisdiction arises such as the USA, in which stable coin emitters are necessary to keep reserves with state-regulated banks.
How Banks Can Integrate Stable Coins
In view of the advantages and disadvantages associated with stable coins and traditional finances, industry experts believe that banks should accept these digital assets rather than fear them. “It has become clear that banks cannot afford to sit marginally,” said Smith. “Stable coins are here to stay and the banks should at least be willing to offer custody, payments or reserve services.”
Elliptic has developed a “StableCoin Risk Management Suite” for banks and financial institutions that want to integrate stable coins. The platform provides risk management tools, including issuer due diligence and risk monitoring, to help banks meet high regulatory standards.
A Hybrid Approach to Stable Coins
While Elliptic’s offer can address some concerns, other financial institutions may want to pursue a hybrid approach. For example, Wayn found that JP Morgan’s stablecoin offerings show that the introduction of beneficiaries for large institutional customers can be a successful strategy for banks.
“Proven public stablecoins are the best way for retail and cross-platform trade, since they already have the scale, interoperability and brand recognition that are necessary to support this mainstream print,” said Wayn. Therefore, a stable coin strategy that focuses on both institutions and retail customers can be best suited for banks.
The Dilemma of Banks Integrating Stable Coins
It becomes clear that banks cannot afford to ignore stable coin innovation, but a number of challenges remain, even with current integration solutions. Dave Hendricks, CEO and founder of the RWA tokensization platform Vertalo, told Cryptonews that the issue of stablecoins for banks is a large dilemma.
“Banks have to think about whether they should build their own technology to spend stable coins or work with existing stable coin companies such as Circle,” said Hendricks. “Since stable coins issued by the banks cannot legally pay interest on inserts, banks have to decide whether they want to incur capex in order to offer a unattractive retail product or simply create something to facilitate interbank payments.”
For more information on how banks can integrate stable coins, visit https://cryptonews.com/news/banks-can-integrate-stablecoins-but-it-wont-be-an-easy-transition/
