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The stablecoin market could reach trillions of dollars in the next few years, creating both opportunities and risks for banks.
To Michael Reed, a partner at the law firm Skadden, Arps, Slate, Meagher & Flom, bankers are taking too much of a blasé approach to stablecoins. “When they would get around to this topic, they’re like, ‘Oh yeah, stablecoin, we’ll see what happens,’” he says. “My response is ‘What do you mean — and see what happens?’”
This approach may not be taking into account the significant impact stablecoins could have on the financial services industry. Stablecoins already have a market capitalization of $324 billion. Citigroup estimates that amount will grow to at least $1.9 trillion and potentially up to $4 trillion by 2030. While the Financial Action Task Force estimates there were more than 250 types of stablecoins in circulation as of mid-2025, just two, Tether Operations Limited’s USDT and Circle Internet Group’s USDC, account for more than 80% of the market. Those coins are backed primarily by short-term Treasuries and cash reserves held by crypto companies and a small number of banks.
While that means the stablecoin market is very concentrated at the moment, Reed, who specializes in working with financial institutions and fintechs, says he consistently tells bankers it won’t always be that way. “You should think about it from a balance sheet mix perspective,” he says. “Because this is going to hit quickly once it happens, and it is a great opportunity to make fee income for basically doing what you do every day.”
To learn more about the risks and opportunities of stablecoins, download the report, sponsored by Skadden, Arps, Slate, Meagher & Flom, here.
