TLDR
- Coinbase says most stablecoin users are international, not domestic bank customers.
- Two-thirds of stablecoin transfers happen on decentralized finance platforms.
- Stablecoins help reinforce the US dollar’s global role rather than compete with banks.
- US bank deposits exceed $18 trillion, limiting stablecoins’ domestic impact.
The rise of stablecoins has sparked debate over their potential effect on traditional US banks. Coinbase has publicly dismissed concerns that these digital assets could drain deposits or weaken lending. The company emphasizes that most stablecoin demand comes from international users and operates largely on decentralized platforms. Coinbase argues that stablecoins support the US dollar’s global role rather than compete with domestic banking systems.
Stablecoin Demand Driven by Global Markets
According to Coinbase, the majority of stablecoin users are outside the United States. Investors in countries with currency instability or limited banking access use dollar-pegged stablecoins as a reliable alternative. “Most stablecoin demand comes from outside the US, expanding dollar dominance globally, not competing with your local bank,” said Faryar Shirzad, Coinbase’s chief policy officer.
Source: X
Shirzad added that the market narrative claiming stablecoins could harm banks ignores how these assets function. Roughly two-thirds of stablecoin transfers occur on decentralized finance (DeFi) platforms, independent of traditional banking. Coinbase described stablecoins as a financial layer operating parallel to, but outside, domestic banks.
Stablecoins and US Banking Systems
The company stressed that stablecoins pose minimal risk to US bank deposits. Domestic banks and stablecoin holders rarely overlap, and foreign demand dominates circulation. Coinbase noted that even if global stablecoin holdings reach $5 trillion, the majority would remain outside the US, leaving domestic deposits largely unaffected. Currently, US bank deposits exceed $18 trillion.
Shirzad said stablecoins could enhance, not weaken, bank services. “Community banks and stablecoin holders barely overlap. In fact, banks could improve their services with stablecoins,” he stated. Coinbase suggested that stablecoins offer American financial institutions a competitive advantage in the digital economy while extending US monetary influence globally.
Regulatory Developments and Industry Adoption
The defense comes as the US implements the GENIUS Act, a regulatory framework governing stablecoin issuers and payment systems. The framework aims to provide clarity and security for stablecoin operations, promoting adoption among banks and financial firms.
Coinbase’s comments follow industry moves such as Western Union’s plan to launch the US Dollar Payment Token (USDPT) on the Solana blockchain. Scheduled for 2026, the token will enable faster, lower-cost cross-border transfers. Devin McGranahan, Western Union’s CEO, said the blockchain solution continues the company’s 175-year mission to simplify money transfers while enhancing transparency.
Solana was chosen for its speed, scalability, and low transaction costs, supporting Western Union’s high-volume remittance operations. The initiative reflects broader trends in which financial institutions integrate blockchain technologies without displacing traditional banking systems.
Stablecoins as a Global Financial Tool
Coinbase maintains that stablecoins function as a global financial tool rather than a domestic banking threat. By supporting dollar-based transactions internationally, stablecoins help maintain the US currency’s dominance and provide alternatives for underbanked populations.
Shirzad concluded that stablecoins are part of a growing digital financial ecosystem that complements banks. He encouraged policymakers to view these assets as strategic tools rather than risks.
The news confirms Coinbase’s position that stablecoins are primarily international instruments, reinforcing the US dollar globally while coexisting with domestic banking infrastructure.
Get 3 Free Stock Ebooks
Discover top-performing stocks in AI, Crypto, and Technology with expert analysis.
- Top 10 AI Stocks - Leading AI companies
- Top 10 Crypto Stocks - Blockchain leaders
- Top 10 Tech Stocks - Tech giants
