Although banks and industry groups have warned that rapid growth in stablecoins could precipitate large-scale deposit outflows and threaten credit availability, Coinbase disputes that narrative as unsupported by empirical evidence. The company characterizes claims of a $6 trillion flight from banks as speculative, noting that forecasts from groups such as the American Bankers Association, the Bank Policy Institute, and the Treasury Borrowing Advisory Committee lack demonstrable causal links to observed deposit behavior. Coinbase’s Chief Policy Officer has pointed to analyses showing no meaningful correlation between the rise of stablecoins and community bank deposit declines, and asserts that real-world transaction patterns do not match the dramatic deposit erosion scenario promoted by some banking representatives.
Coinbase frames stablecoins primarily as payment and settlement instruments rather than as direct substitutes for bank savings, observing that a large share of stablecoin activity supports digital asset trading and cross-border transfers, particularly in regions with weaker financial infrastructure. The firm highlights that roughly half of a $2 trillion estimate for stablecoin flows in 2023 was international, concentrated in Asia, Latin America, and Africa, where low-cost remittances and rapid settlement drive usage. By contrast, U.S. retail deposits have remained relatively stable, and banks’ own balance sheets show substantial excess reserves at the Federal Reserve, which Coinbase uses to question the premise that deposit bases are being materially drained. This international usage also aligns with trends in blockchain and IoT integration that improve transaction transparency in emerging markets.
Economic incentives also inform Coinbase’s rebuttal, as the company suggests that banks’ public warnings may be influenced by the threat stablecoins pose to payment fee revenue, pointing to an estimated $187 billion annual market for swipe fees. Stablecoins offer cheaper, faster transfer options that could pressure interchange margins, and Coinbase contends that fee protection, rather than systemic risk mitigation, motivates some opposition. Nevertheless, the company acknowledges that regulatory clarity and robust consumer protections are important, and it recommends evidence-based policymaking that distinguishes between payment innovation and genuine threats to banking system stability. Coinbase also notes that the stablecoin market has grown to nearly $290 billion in market value, underscoring the need for balanced oversight. Coinbase argues that banks could also benefit by integrating stablecoin technology into their payment rails.
