Leading U.S. crypto exchange Coinbase has rejected claims that stablecoins are draining bank deposits and weakening lending.
In a blog post published September 16, 2025, by policy chief Faryar Shirzad, the company called the idea of “deposit erosion” a myth, stating that stablecoins are used for payments, not savings, and therefore do not pose a threat to the banking system.
The post argued that recent analysis showed no connection between stablecoin use and deposit flight at community banks. It noted that banks warning about risks are instead protecting the $187 billion they earn each year in card swipe fees.
“Stablecoins don’t threaten lending—they offer a competitive alternative to banks’ $187 billion annual swipe-fee windfall,” the company wrote. Coinbase stressed that people use stablecoins to move money faster and cheaper across borders, not as a replacement for deposits.
The exchange also dismissed a report from the U.S. Treasury Borrowing Advisory Committee, which predicted $6 trillion in potential deposit losses against a $2 trillion stablecoin market by 2028.
Coinbase said the math did not add up and that most stablecoin use happens abroad, with Asia, Latin America, and Africa leading adoption. According to its data, more than $1 trillion of the $2 trillion in transactions during 2024 occurred outside the United States.
Coinbase also said this global use supports the dollar’s dominance rather than weakening U.S. banks. It pointed to the positive market performance of banks and crypto firms after Congress passed the GENIUS Act, showing the two industries can coexist.
Meanwhile, Bitwise Investment Chief Matt Hougan added fuel to the debate, writing on X that banks should improve their offerings instead of resisting stablecoin competition.
In its blog, Coinbase argued that if banks truly lacked deposits, they would raise rates instead of keeping $3.3 trillion in reserves at the Federal Reserve. These reserves, it noted, earned banks $176 billion last year.
Coinbase compared current resistance to earlier fights against ATMs and online banking, saying history shows incumbents often push back against innovation.
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