Traditional banks could see their market dominance challenged by the rise of stablecoins and tokenized real-world assets as these digital currencies move beyond their current niche uses.
Summary
- Moody’s Investors Service suggests that the disruption risk for the banking sector remains limited at this stage because current U.S. rules prevent stablecoins from paying yield.
- The growth of tokenized real-world assets and stablecoins could eventually place pressure on traditional banks by causing deposit outflows and reducing their overall lending capacity.
Moody’s Investors Service Digital Economy Group associate vice president Abhi Srivastava told crypto media that stablecoin use remains “limited” for now, even though the sector’s market capitalization climbed past $300 billion by the end of last year.
While the role of these assets in cross-border commerce and on-chain finance is expanding, the existing US payment landscape is currently fast and trusted enough to keep disruption at bay.
Srivastava observed that “for the banking sector, at this stage, disruption risk appears limited,” largely because US rules prevent stablecoins from paying yield to holders.
According to him, domestic deposits are unlikely to be replaced at scale while these yield restrictions remain in place. However, long-term growth in stablecoins and tokenized RWAs—physical or financial assets represented by blockchain tokens—could eventually trigger deposit outflows.
Such a trend would reduce the lending capacity of traditional banks by placing “pressure” on their core business models, he added.
Legislative gridlock over yield and oversight
Regulatory policy regarding stablecoins has turned into a major point of contention between the crypto industry and the banking sector. The primary concern centers on yield-bearing stablecoins, which banks fear will directly compete for their customers.
This specific issue has become a major stumbling block for the Digital Asset Market Clarity Act of 2025, or the CLARITY Act.
The Digital Asset Market Clarity Act of 2025, or the CLARITY Act, has hit a wall in Congress as lawmakers struggle to balance the interests of the crypto industry with those of the bank lobby. The framework was designed to set clear rules for asset classification and regulatory oversight, but it stalled after major players like Coinbase voiced opposition to specific provisions.
The ban on yield-bearing stablecoins and a lack of legal safeguards for open-source developers remain the primary points of contention.
Banks have lobbied heavily against allowing stablecoins to offer interest, fearing such a move would trigger massive deposit outflows and sap their ability to provide loans. Srivastava warned that over time, the growth of tokenized RWAs—physical assets represented on a blockchain—could place significant “pressure” on traditional financial institutions.
Senator Thom Tillis of North Carolina recently signaled plans to introduce a compromise draft to bridge the gap between crypto firms and traditional banks. However, this updated proposal has already faced resistance and remains unreleased to the public.
