Stablecoins May Not Drain Banks' Deposits, But They Can Still Raise Lending Costs
The stablecoin debate has been ongoing for some time, with many experts warning that they could drain banks of dollars. However, a closer look at the numbers reveals that this may not be the case.
According to an example used by the Bank for International Settlements in its 2026 analysis, if someone buys $100 worth of stablecoins, the company issuing them takes the dollars and puts them into its own bank account. The customer gets a balance on the blockchain that can be sent around.
At first glance, this seems like it shouldn't affect banks too much. They lost one deposit, but they also got another back in its place, so why should they worry? However, the reality is more complicated than that.
The thing is, banks like having customers who leave their money there for a long time. They can use these deposits to fund loans and other activities. But if someone takes their money out of the bank to buy stablecoins, it's no longer available to be used by the bank in this way.
This can make lending more expensive for banks, which could eventually affect people who take out loans, even if they don't know what a stablecoin is.