Stablecoins are no longer a fringe market. Their total supply has exceeded $300 billion, and USDT₮, the largest stablecoin, briefly overtook Ethereum by market cap to become the second largest digital asset behind bitcoin. The banks have the right to be aware.
But paying attention is different from pushing Congress to slow the market.
Stablecoins create new competition around payments, settlement, float and customer relations. Some of that competition will be uncomfortable for the banks. It should be. Fintech doesn’t just move forward when the incumbents are doing well.
That does not make stablecoins a systemic threat to community banks.
There is a precedent for this. Over the past decade, fintech companies have integrated banking functions into consumer apps, business platforms, payroll tools, lending products and payment systems. Many did so through banking partners. It changed the way customers interacted with financial services. It created new competition. This pushed the banks to modernize. But that didn’t wipe out the community banks.
Fintech applications such as PayPal and Stripe have popularized digital banking and built large user bases since their emergence. However, banks have never treated fintech as a threat, but rather as an opportunity to expand their offerings and improve the user experience through collaborations and integrations. Looking at the numbers alone, SoFi, the largest publicly traded fintech bank, had $37.5 billion in total deposits in the last quarter of 2025, which is less than 0.2% of the US bank’s $20 trillion deposit base. If fintech was never a threat, why treat stablecoins differently?
