- Coinbase argues stablecoins are primarily payment tools, not savings products, thus not linked to major U.S. bank withdrawals.
- Activity following new stablecoin legislation saw bank and crypto stocks both rise, showing they can succeed together, says Coinbase.
Coinbase has directly addressed concerns that stablecoins pose a threat to the United States banking system. The company described the idea of deposit erosion as incorrect. In a public statement, the exchange presented its view that fears of stablecoins pulling money from banks are not supported by evidence.
The company referred to its own review of the matter
This review found no strong connection between the use of stablecoins and withdrawals from smaller banks. According to Coinbase, stablecoins are not for saving money. They are tools for making payments. The exchange gave an example, stating that a person using stablecoins to pay a supplier in another country is not moving their savings. Instead, they are selecting a payment method that is faster and costs less.
Coinbase also questioned a report from a US Treasury committee. That report suggested the possibility of a very large amount of money leaving banks. However, the same report only predicted the stablecoin market would reach a much smaller size. Coinbase stated that these numbers are not consistent.
The company noted that a majority of transactions involving stablecoins happen outside US borders. This activity is more common in places with less developed financial systems. Data from the International Monetary Fund was cited, indicating that more than half of all stablecoin transaction volume in 2024 took place in Asia, Latin America, and Africa.
Because almost all large stablecoins are linked to the US dollar, their use in other countries supports the dollar’s global role. Therefore, Coinbase argues that stablecoins do not reduce bank deposits in the US. Instead, they help increase the dollar’s use around the world without greatly affecting how much credit is available domestically.
The company also pointed to market activity after the introduction of a proposed US law for stablecoins. It observed that the value of bank stocks and companies like Coinbase and Circle moved in a similar positive direction. This, according to the exchange, shows that banks and stablecoin companies can both do well.
