Coinbase Defends Stablecoins Against Claims of Threatening US Banks
Iris Coleman Oct 31, 2025 00:28
Coinbase argues that stablecoins bolster the US dollar's global role, dismissing concerns about their impact on US bank deposits.
Coinbase has addressed growing concerns that stablecoins could potentially threaten US bank deposits, asserting that such fears are unfounded. According to CryptoNews, the cryptocurrency exchange claims that the demand for stablecoins is largely driven by international markets, which seek exposure to the US dollar.
Stablecoin Demand Driven by Global Markets
Coinbase's Chief Policy Officer, Faryar Shirzad, noted in a market note that the perception of stablecoins as a threat to bank lending is misguided. He emphasized that most stablecoin demand originates from outside the United States, where international users look to stablecoins as a means to access the dollar, thus reinforcing rather than competing with the local banking system.
In regions experiencing currency depreciation or limited banking access, dollar-pegged stablecoins offer stability and facilitate global commerce. Coinbase's report highlighted that approximately two-thirds of stablecoin transactions occur on decentralized finance (DeFi) platforms, which operate independently from traditional banks, forming a parallel financial system.
Stablecoins as a Strategic Tool
Shirzad argued that stablecoins should be viewed as a strategic asset for extending the US dollar's global influence rather than as a threat to community banks. He pointed out that the overlap between community banks and stablecoin holders is minimal, and banks could potentially enhance their services by integrating stablecoins into their offerings.
Coinbase also disputed claims that the rise of stablecoins would lead to a significant outflow of funds from US bank deposits. The firm estimated that even if global stablecoin circulation reached $5 trillion, most of these assets would remain outside the US, with negligible impact on domestic deposits currently exceeding $18 trillion.
Western Union's Entry into Stablecoins
In related news, Western Union is planning to launch the US Dollar Payment Token (USDPT) on the Solana blockchain in the first half of 2026. This move is part of a broader strategy to utilize blockchain technology for faster and more cost-effective global money transfers. The USDPT, issued by Anchorage Digital Bank, aims to reduce reliance on traditional banking channels and offer lower fees and quicker settlements.
Western Union's CEO, Devin McGranahan, underscored the choice of Solana for its speed, scalability, and low transaction costs, which are essential for the company's high-volume remittance operations. By leveraging blockchain technology, Western Union seeks to modernize its money transfer services.
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