Stablecoin Surge Forces Banks to Rethink Digital Payments Strategy

Stablecoins remained within the crypto ecosystem for most of their initial decade, acting as reserve capital on exchanges between trades. Their market supply increased from $27 billion at end-2020 to over $300 billion as of now.

A substantial part of that expansion is now taking place beyond order books. US-bound cross-border flows reach nearly $127 billion each month, and companies processed $226 billion in B2B stablecoin payments last year, per Artemis Analytics.

This growth has drawn the notice of the institutions it once threatened. Banking associations urged Congress to prohibit crypto companies from offering rewards on stablecoin holdings, contending that an interest-bearing token constitutes a disguised deposit.

Thus far, lobbying has not slowed newcomers. Visa, BlackRock, Google, and DoorDash are backing Open USD, a stablecoin scheduled for launch this year, in a market still dominated by Tether and Circle.

Banks are now posing a different question: whether issuing their own token is necessary to protect the territory they already control.

BeInCrypto interviewed specialists from Triple-A, ChangeNOW, Infinia, StraitsX, and other firms regarding what shifted in 2026 and whether a bank-issued coin delivers value for users.

Banks End Their Watching Phase

The change is apparent in recent moves. On September 1, 21 financial firms, among them Bank of America, Citi, Goldman Sachs, and Deutsche Bank, pledged to establish a new entity in the latter half of 2026 that will issue a stablecoin.

Global Banking Giants Launch Stablecoin Company

A major coalition including @BankofAmerica, @Citi, @GoldmanSachs, @DeutscheBank, and @UBS is building a traditional alternative to incumbents like Circle.

Banking powerhouses are actively moving to capture digital settlement…

— BeInCrypto (@beincrypto) September 1, 2026

The consortium intends to launch a dollar token in the first half of 2027, followed by a euro version, and states the product will adhere to the GENIUS Act and MiCA regulations.

Other institutions are also active. SoFi Bank made its stablecoin, SoFiUSD, accessible to nearly 15 million members via its app in May, five months after introducing it for corporate clients. JPMorgan, not part of the 21-bank group, operates its JPMD deposit token on Base.

HSBC intends to issue a Hong Kong dollar (HKD)-denominated stablecoin in the second half of 2026. A change occurred this year that made the effort of launching a stablecoin worthwhile.

Tianwei Liu, CEO and co-founder of StraitsX, which holds a Major Payment Institution (MPI) license from the Monetary Authority of Singapore (MAS), describes 2026 as a turning point for stablecoins, where regulatory certainty and institutional uptake made the price of inaction increasingly untenable.

“For banks, issuing a stablecoin is a way to stay on the rails as the underlying infrastructure evolves.”

Liu noted that the stablecoin sandwich concept clearly demonstrates this opportunity. In essence, a stablecoin sits between two fiat payment systems, bridging them.

End users and merchants do not have to directly hold or engage with the stablecoin; it can function quietly as the settlement layer, driving speed and cost savings in transactions.

He added that this does create pressure on conventional banking revenue streams, especially from cross-border payments. Nevertheless, it does not necessarily pose a severe danger to banks.

Ianai Urwicz, co-founder and CEO of Infinia, quantifies the potential losses for banks.

“In 2025, global B2B stablecoin payments surged 733% year-on-year to $226 billion, proving that corporate treasurers are actively bypassing legacy correspondent banking networks to avoid multi-day settlement delays and high FX friction. This represents an immediate threat of deposit flight: Recent numbers show that up to $1 trillion in emerging-market bank deposits could migrate into stablecoins over the next three years.”

Urwicz says traditional banks are recognizing that remaining inactive means ceding their most valuable corporate liquidity, treasury connections, and transaction fee revenues to regulated blockchain innovators.

Two additional experts attributed the shift to the GENIUS Act.

Vincent Chok, CEO and co-founder of First Digital, argues that banks were awaiting regulatory permission to enter the space.

“The law changed. The GENIUS Act gave banks a rulebook where there was previously only uncertainty, defining what a stablecoin is and what is required before issuing one…The second reason is volume. Stablecoin transaction volume passed $28 trillion in the first quarter of 2026, settling on networks where banks have historically had limited control or participation. When money moves at that scale outside a bank’s control, it becomes difficult to ignore.”

Alex Witt, founding general partner at Verda Ventures, concurs that the act provided an opening.

“GENIUS gave banks a federal perimeter to issue inside, and the market showed them the cost of waiting…The threat is the spread. Stablecoins exposed how fragile the zero-yield deposit model is, which is why the CLARITY yield fight was never about consumer protection.” 

Issuing a token allows banks to retain the float. At the same time, data from Stablescape, Verda Ventures’ real-time index of stablecoin firms, indicates that issuers are entering a phase of consolidation. The number of new issuers dropped 7% in 2025 and has declined 34% so far this year.

The Client’s View of Stablecoin Benefits

The rationale for banks is straightforward. A stablecoin enables them to preserve the float, retain corporate customers, and remain on payment rails they no longer dominate. The advantages for customers are not as clear.

Stablecoins moved an estimated $135B across borders in 2025.

That's just 0.31% of a $44.3T non-wholesale cross-border payments market. Initial 2026 YTD data suggests growth of around 23%.

As stablecoin infrastructure expands, cross-border payments remain one of the clearest…

— OpenAssets (@OpenAssetsInc) September 10, 2026

A company moving from a bank account to a bank-issued token is not merely gaining speed. It is exchanging one set of safeguards for another, and the amounts at stake are substantial.

For a business keeping $1 million in a bank account for supplier payments, the equation involves two factors. How much does the token reduce costs when funds are sent, and what protection is lost once the money exits the deposit account?

“Move it when suppliers are cross-border and settlement time is eating working capital; on-chain, that $1 million recycles several times a day instead of sitting pre-funded for three days. If suppliers are domestic on ACH, don’t bother. What you give up is that a bank stablecoin isn’t a deposit: no FDIC insurance, no yield under current rules, and an issuer freeze-and-burn capability. The trade is yield and insurance for velocity, worth it on the portion that moves and not on the portion that sits.”

The savings from speed vary based on the destination. Eric Barbier, CEO of Triple-A, a global payment firm, chose a real example from his clientele to illustrate a live cross-border payment.

“Take an African car dealer paying a Japanese exporter for vehicles, a real use case from one of our clients. A traditional international wire can cost 3–5% once you include FX spreads and intermediary fees, and it may take several business days. Using stablecoin rails, the value can move in a dollar stablecoin within minutes, while the exporter receives JPY in Japan. On a $100,000 payment, bringing the all-in cost below 1% can save several thousand dollars.”

The cost reductions are genuine. Where the savings accrue is a separate issue. Bernardo Brites, co-founder and CEO of Trace Finance, contends that issuing the token is the simple part.

“Issuing the token is easy; owning the local FX and settlement leg on the other end is what actually determines the customer’s savings. We move more than one billion dollars a month for multiple large corporate and our margin is a single, disclosed spread because we hold both sides, the digital dollar and the local rail. A bank-issued stablecoin without that local infrastructure just hands the economics to whichever partner does own it. BIS’s interoperability concern is really this same gap, dressed as a technical problem.”

Will Bank Tokens Operate Outside Their Issuer’s Walls?

All members of the consortium can issue a token. The more challenging question is whether the token can function outside the issuing bank.

Even the BIS, which doubts whether stablecoins can currently fulfill the role of money and prefers tokenized deposits, recognizes the same interoperability deficiency in the bank-built systems to date.

During a speech at Jackson Hole on August 28, general manager Pablo Hernández de Cos stated that much of the activity occurs on closed platforms or is more accurately termed bank-issued stablecoins, and these tokens exhibit many of the same deficiencies as current stablecoins. A token that settles solely within a single bank’s infrastructure represents only one segment of a payment rail.

Tim Stanyakin, Head of Growth at ChangeNOW, noted that banks already collaborate via current payment and settlement systems.

The issue is whether their stablecoins will enhance that interoperability or produce new closed digital money ecosystems.

“Bank-backed stablecoins could give users something they already understand: a familiar institution behind their digital money, with clearer regulatory recourse. But the real value will depend on what users can do with these tokens beyond the issuing bank.”

The potential failure scenario is straightforward to imagine.

“If Bank A’s stablecoin cannot interact seamlessly with Bank B’s token, public blockchains, or other digital assets, it risks becoming little more than a digitized version of the same fragmented payment system. Ultimately, users will care less about who issues the coin and more about where they can use it, how easily they can move it, and how quickly they can convert it into other forms of digital money.”

First Digital’s Chok identifies two obstacles: acceptance and regulation.

“A competing bank or a third-party payment app has to be willing to hold a token issued by a rival. This is a commercial decision rather than a technical one…The second is regulation. Banks operate under different rules in different countries, and as of today, there is no universally agreed framework for stablecoins across jurisdictions.”

The executive noted that without greater alignment between commercial acceptance and regulatory structures, a token operating exclusively within its issuing bank cannot genuinely evolve into a payment rail.

Witt asserts that the friction lies outside the token itself.

“The problem is that the token is fungible and the identity behind it is not: under proposed GENIUS rules, a receiving institution can rely on the sender’s KYC only if that sender is federally regulated, so every hop outside the perimeter triggers re-verification.”

Existing Stablecoin Corridors Are Already Established

As the consortium works on its charter, independent players are moving ahead. Circle activated Arc’s public mainnet on September 16, a layer-1 blockchain where fees are denominated in USDC.

Validators comprise BlackRock, Visa, Mastercard, Standard Chartered, and DTCC, among others. Open USD is expected later this year, with over 140 partners set to share its reserve income. Tether’s USDT, at approximately $183 billion, surpassed the combined market cap of all other stablecoins as of mid-September.

That is the market banks are stepping into. Their advantage is clear: a recognizable brand behind the token and the ability to contact regulators in case of issues carry significant weight.

However, trust matters only where the token is accepted, and that remains the domain where independent players still have an edge.

Triple-A’s Barbier states that independent stablecoins offer freedom and a network advantage.

“They can move across banks, wallets, payment providers, and blockchains, rather than being tied to a single institution’s ecosystem.”

He added that a bank-issued stablecoin may perform excellently within the bank’s own ecosystem. The restriction arises when the payment must exit that network.

“Cross-border businesses need money that can move between different institutions, platforms, and markets. So the real competition is not about who can issue a token. It is about whose money can travel furthest with the least friction.”

Witt pinpoints the friction in a specific region: nations where dollars are scarce.

“A bank consortium coin will be excellent for institutional settlement in New York, but it won’t be the dollar a P2P desk in Lagos or a supplier in Buenos Aires actually quotes and holds; that’s USDT, built corridor by corridor over a decade with almost none of its $184.6 billion in circulation requiring U.S. approval.”

That does not imply the banks will fail. StraitsX’s Liu offered a final assessment.

“Banks that treat stablecoins purely as competition risk disintermediation. Those that integrate them into payments and treasury can capture the next generation of payment flows.”

The consortium’s token is scheduled for the first half of 2027, assuming the timeline is maintained. By that point, the necessary corridors will have spent another year solidifying around a different dollar. Arc is active. Open USD is just months from launch. Banks are drafting the rules for a game that is already well advanced.