Banks are treading carefully on stablecoins despite market growth, S&P Global says

Finance Share Share this article Copy link X icon X (Twitter) LinkedIn Facebook Email Banks are treading carefully on stablecoins despite market growth, S&P Global says Most U.S. lenders remain in a wait-and-see mode as deposit risks, regulatory shifts and new competition complicate strategy, according to the report. By Will Canny , AI Boost | Edited by Stephen Alpher Apr 9, 2026, 12:35 p.m. Make preferred on Banks tread carefully on stablecoins despite market growth, S&P Global says. (Unsplash) What to know : S&P Global says most banks are cautious, with only 7% of smaller institutions developing frameworks and none actively piloting stablecoin capabilities. Concerns center on deposit outflows, competitive pressure from new entrants and unclear revenue impacts. Larger banks may explore issuance, while smaller institutions are more likely to act as intermediaries in a multi-rail payments system, the report said. In this article BTC BTC $ 71,207.17 ◢ 1.20 % Banks are approaching stablecoins cautiously despite rapid market growth, reflecting early-stage strategy and rising structural concerns, according to a report by S&P Global Market Intelligence. According to the Wednesday report, the question is no longer whether stablecoins will endure, but how they will reshape business models, infrastructure and revenue, For banks, the trade-offs are sharp, spanning deposit risk, modernization costs and new competition. A wait-and-see stance still dominates. S&P Global’s Q1 2026 U.S. Bank Outlook survey found just 7% of 100 mostly smaller institutions are developing frameworks, with none actively piloting, underscoring how exploratory strategies remain. "Most financial institutions remain early and cautious," said Jordan McKee, director of fintech research at S&P Global Market Intelligence, in emailed comments. "Our survey of U.S. banks shows that stablecoin strategy is still largely exploratory, with limited internal development and no active pilots among smaller institutions." Stablecoins, digital tokens pegged to assets like fiat currencies or commodities, have become a core layer for payments and settlement in crypto, widely used in trading and cross-border flows. The market is dominated by Tether’s USDT, followed by Circle Internet’s (CRCL) USDC. The stablecoin market has grown rapidly into a roughly $300 billion-plus sector, with total market capitalization surpassing $316 billion in early 2026 after nearly doubling since 2023, according to multiple data sources. Transaction volumes have also surged into the tens of trillions annually, underscoring rising use in trading, payments and cross-border transfers, while forecasts point to continued expansion, potentially reaching $500 billion or more in the near term as institutional adoption accelerates. Pressure is building. The report pointed to growing concern over deposit cannibalization and customer migration, alongside a surge in stablecoin mentions on earnings calls following the GENIUS Act’s passage in July 2025. Competition is also intensifying. S&P Global highlighted a wave of nonbanks pursuing charters to house stablecoin issuance, custody and settlement within regulated entities, positioning themselves as credible alternatives. Banks are also wary of yield-like incentives in stablecoin ecosystems that could compete with deposits, even as direct interest payments remain restricted. Responses will diverge. S&P Global analysts expect large, global banks to explore issuing tokenized deposits or bank-backed digital assets, while regional and midsize lenders focus on facilitating access via fiat on- and off-ramps. Regardless of strategy, banks will remain key gateways between fiat and stablecoin networks, but doing so will require significant upgrades to legacy systems ill-suited for real-time digital asset activity. Cross-border banks face the strongest push to modernize as payments shift to multi-rail systems combining traditional, real-time and tokenized networks. Interoperability and wallet infrastructure will be critical, with large banks building multi-network connectivity and smaller firms leaning on fintech partners. Secure custody and embedded compliance are expected to become standard, the report added. Read more: Stablecoin rewards restrictions can slow but not stop Circle's USDC, says Citigroup Stablecoins banks AI Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards . For more information, see CoinDesk's full AI Policy . More For You Encryption Supremacy: Zcash and Privacy in the Age of Scale By CoinDesk Research Mar 31, 2026 Commissioned by GenZcash Most crypto privacy models weaken as blockchain data grows. Encryption-based models like Zcash strengthen. CoinDesk Research maps the five privacy approaches and examines the widening gap. Why it matters : As blockchain adoption scales, the metadata available to machine learning models scales with it. Obfuscation-based privacy approaches are structurally degrading as a result. This report provides a comprehensive comparison of all five major crypto privacy architectures and a framework for evaluating which models remain durable as AI capabilities improve. View Full Report More For You Bithumb moves to seize assets over mistaken $8 million bitcoin dispute By Francisco Rodrigues | Edited by Omkar Godbole 3 hours ago On Feb. 6, staff mistakenly entered "BTC" instead of "KRW" in a promotion, crediting roughly 620,000 bitcoin worth over $40 billion. What to know : Bithumb asked a court to freeze assets tied to seven bitcoin not returned after a February payout error, where users kept mistaken funds. On Feb. 6, staff mistakenly entered "BTC" instead of "KRW" in a promotion, crediting roughly 620,000 bitcoin worth over $40 billion. Users sold about 1,788 BTC before... Read full story Latest Crypto News The $21 billion AI bet: Meta and CoreWeave ink deal for NVIDIA’s next-gen superchips 16 minutes ago Tokenized perpetual swaps hit $31 billion weekly volume on commodities volatility 36 minutes ago Bitcoin’s $80,000 bull bet just took over the market 1 hour ago Bitcoin stalls below key resistance as analysts clash over next move 2 hours ago Strategy’s STRC sees one of its highest volume days, with just one penny of volatility 2 hours ago Bithumb moves to seize assets over mistaken $8 million bitcoin dispute 3 hours ago Top Stories Iran's crypto tanker tolls are the latest step in its sanctions‑busting trade network 4 hours ago Bitcoin's next big move hinges on oil, and right now it's a total coin flip 7 hours ago U.S. Treasury proposes demands that stablecoin firms be set to police bad transactions 20 hours ago Iran eyes crypto toll for oil tanker transits through Strait of Hormuz, according to FT 23 hours ago Bitcoin is above $70,000 on Iran ceasefire, but rally is turning cautious for good reasons 21 hours ago Adam Back denies he’s Satoshi Nakamoto after NYT report claims he’s Bitcoin’s creator 22 hours ago In this article BTC BTC $ 71,207.17 ◢ 1.20 %