Stablecoin market capitalization surpassed $300 billion by the end of last year, according to Moody’s. The milestone highlights accelerating adoption, even as immediate disruption to traditional banking remains constrained.
Abhi Srivastava, associate vice president at Moody’s Investors Service, said current usage remains limited despite growth in cross-border payments and onchain finance. U.S. regulatory restrictions prevent stablecoins from offering yield, reducing their appeal as direct substitutes for bank deposits. As a result, deposit migration risk remains contained in the near term.
Could Yield-Bearing Stablecoins Trigger Deposit Flight?
The regulatory debate is now central to how the sector evolves. Lawmakers are divided over whether stablecoins should be allowed to offer interest, a feature banks argue would directly compete with their deposit base. The Digital Asset Market Clarity Act of 2025 remains stalled in Congress amid disagreements over yield provisions and oversight frameworks.
Stablecoins are also expanding alongside tokenized real-world assets (RWAs), which represent traditional financial instruments on blockchain rails. But, without yield incentives, adoption is still trailing other financial innovations that offer direct returns. Compared with traditional bank deposits, which provide insured stability and interest, stablecoins remain primarily transactional tools rather than savings vehicles.
“For the banking sector, at this stage, disruption risk appears limited,” Srivastava said.
He added that long-term growth in stablecoins and RWAs could place “pressure” on bank lending models if deposit outflows accelerate under a more permissive regulatory regime.
The next catalyst will be whether U.S. lawmakers can resolve the yield debate, particularly as Senator Thom Tillis prepares a compromise proposal that could redefine how stablecoins compete with traditional deposits.
