What happened?
Coinbase pushed back against claims that stablecoins will drain U.S. bank deposits and destroy bank lending, saying most demand comes from outside the United States. They highlighted that roughly two-thirds of stablecoin activity happens on DeFi platforms and that stablecoins function as a parallel transactional layer rather than a direct competitor to domestic banks. At the same time, Western Union announced plans to launch a dollar-backed stablecoin on Solana, signaling traditional payment firms are moving into the space.
Who does this affect?
The biggest impacts are on international users, underbanked people, and companies that need fast, low-cost cross-border payments, rather than local U.S. depositors. DeFi platforms, crypto firms, and payment providers like Western Union stand to gain from broader stablecoin use, while community banks may see little direct overlap with stablecoin holders. Regulators and U.S. financial firms are also affected as they adapt to rules like the GENIUS Act and explore bank-issued or bank-backed stablecoin products.
Why does this matter?
If stablecoins remain primarily foreign-held and used for cross-border flows, they could actually strengthen the U.S. dollar’s global role without significantly reducing domestic bank deposits. That shift would push more transaction volume onto blockchain rails, speed up remittances, and create new revenue and competition for firms that integrate stablecoin services. Overall, markets could see faster settlement, deeper DeFi liquidity, and changing business models for payments and banking, while U.S. deposit stability largely holds.