Stablecoins May Not Drain Banks of Dollars, But They Can Still Make Lending More Expensive

The rise of stablecoins has led to warnings that they could drain banks of dollars. However, a closer look at the numbers reveals that this may not be the case.

When a customer buys stablecoins, the company issuing them takes the dollars from the customer's bank account and puts them in its own account. The customer then has a balance in the blockchain that they can use to make transactions.

At first glance, it seems like the dollars are still in the bank, and the bank hasn't lost anything. But the reality is that the bank has lost a valuable customer, and with them, the potential for long-term deposits.

The Bank for International Settlements' 2026 analysis found that household deposits can return as issuer deposits, but this can make banks' funding less dependable under regulatory measures.

When a bank lends money, it needs to have a dependable base of deposits to fall back on. But with stablecoins, the deposits are not as reliable, as the issuer can move the money at any time.

This can lead to banks having to spend more to support the money, which can eventually reach people taking out loans.

Some banks have already started to adapt to the rise of stablecoins, offering their own payment services and competing with the issuers.

However, this may not be enough, as the market is still evolving, and banks will need to continue to adapt to the changing landscape.