Coinbase Says Stablecoins Strengthen the Dollar, Not Weaken Banks
The long-running feud between U.S. banks and crypto firms has flared up again, with Coinbase dismissing warnings that stablecoins could hollow out the financial system.
The exchange argues that fears of “deposit erosion” are misplaced, and that stablecoins are helping the U.S. dollar spread globally rather than draining domestic savings.
Banks Cry Foul
Banking groups, led by the Bank Policy Institute, have been pressing lawmakers to rein in stablecoin issuers. They argue that dollar-pegged tokens could one day siphon trillions from deposit accounts, starving lenders of capital. A Treasury advisory panel even floated the possibility of $6 trillion in outflows by 2028.
Coinbase Fires Back
Coinbase calls those numbers nonsense. In its response, the company said the math doesn’t add up — especially given projections of only a $2 trillion stablecoin market within that timeframe. It emphasized that people use stablecoins for payments, not as savings vehicles. Buying tokens to settle an invoice in another country, Coinbase argued, is not the same as pulling cash out of a bank account.
A Global Phenomenon
The exchange also pointed out that most stablecoin usage isn’t happening in the U.S. at all. According to IMF data cited in Coinbase’s paper, more than half of the $2 trillion in transactions last year took place in emerging markets like Asia, Latin America, and Africa. Since nearly all major stablecoins are pegged to the dollar, this usage effectively extends U.S. currency influence abroad.
Signs of Cooperation
Coinbase insisted that banks and crypto firms can grow together. As evidence, it pointed to positive correlations in bank and crypto stocks following the passage of the GENIUS Act, which set the first federal rules for stablecoins earlier this year. Industry leaders like Bitwise’s Matt Hougan echoed the sentiment, arguing that instead of lobbying against competition, banks should raise the yields they offer depositors.
The Road Ahead
The dispute is far from settled. Traditional banks continue to push Congress for stricter limits, while crypto trade groups warn that tighter rules would entrench incumbents and stifle innovation. For now, Coinbase is sticking to its message: stablecoins aren’t draining deposits — they’re giving the dollar new relevance on the global stage.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
