Stablecoins are no longer a fringe market. Its total supply has surpassed $300 billion, and USDT₮, the largest stablecoin, briefly surpassed Ethereum by market capitalization to become the second-largest digital asset behind bitcoin. Banks are right to pay attention.
But paying attention is different from pressuring Congress to slow the market.
Stablecoins create new competition in payments, settlement, floating and customer relations. Some of that competition will be uncomfortable for banks. It should be. Fintech doesn’t advance only when incumbents get comfortable.
That doesn’t make stablecoins a systemic threat to community banking.
There is a precedent for this. Over the past decade, fintech companies have built banking features into consumer apps, commerce platforms, payroll tools, lending products, and payment systems. Many did so through banking partners. That changed the way customers interacted with financial services. Created new competition. It pushed banks to modernize. But it did not end community banking.
Fintech applications like PayPal and Stripe have popularized digital banking and created 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 user experiences through collaborations and integrations. If you look at the numbers alone, SoFi, the largest publicly traded fintech bank, had $37.5 billion in total deposits in the final quarter of 2025, representing less than 0.2% of the US bank’s $20 trillion deposit base. If fintech was never a threat, why treat stablecoins any differently?
