The impact of stablecoins on the banking sector appears limited for now, but banks could face increasing competition and market share erosion as the stablecoin sector and tokenized real-world assets grow, according to Moody's Investors Service.
Abhi Srivastava, an associate vice president at Moody's, told Cointelegraph that while stablecoin use remains limited, their market capitalization exceeded $300 billion at the end of last year. Their role in payments and onchain finance is expanding, but U.S. rules prohibiting stablecoins from paying yield mean they are unlikely to replace traditional bank deposits at scale in the near term.
However, Srivastava warned that over time, growing adoption could pressure the banking sector, leading to deposit outflows and reduced lending capacity.
The debate over yield-bearing stablecoins has become a central issue, stalling the comprehensive CLARITY crypto market structure bill in Congress. Crypto industry opponents, including Coinbase, have cited the bill's prohibition on yield-bearing stablecoins as a major point of contention. Negotiations continue, with Senator Thom Tillis reportedly working on an updated draft, though it has yet to be released. Some analysts warn that if the CLARITY Act fails, it could leave the crypto industry vulnerable to future regulatory crackdowns.