Stablecoins: What Role Will Your Bank Play?

Stablecoins are emerging as an infrastructure layer for money movement, enabling continuous settlement and programmable financial transactions. The market remains early, but the strategic implications for banks are becoming increasingly difficult to ignore.

Financial services providers are taking notice. Stablecoins were mentioned in 107 earnings calls by banks, fintechs and payments providers in 2025, up from just five in 2024, according to S&P Global Market Intelligence data. That heightened focus coincides with expectations for continued market expansion, with Visible Alpha consensus estimates projecting stablecoins in circulation to grow from approximately $269 billion in 2025 to roughly $434 billion by 2028.

Against this backdrop, the strategic question for banks is shifting from whether stablecoins matter to where their institutions should participate in the value chain.

Evaluating Through the Lens of Use Cases
Much of the public conversation around stablecoins remains focused on consumer payments. In practice, the strongest adoption is occurring in institutional and enterprise workflows.

Stablecoins are increasingly being used to facilitate cross-border supplier payments, marketplace payouts and remittances, improve liquidity management for payment providers and corporate treasuries, and serve as the settlement asset for tokenized funds and other digital financial products. These use cases are gaining traction because they address persistent inefficiencies in traditional financial infrastructure, including limited operating hours, settlement delays and reliance on prefunded accounts.

Importantly, this does not mean stablecoins are poised to displace traditional payment rails. Rather, we expect them to coexist alongside existing infrastructure.

Banks should evaluate stablecoins through the lens of use cases, identifying customer segments and payment flows where existing rails remain slow, fragmented or operationally expensive.

The strategic objective should not be to force stablecoins into every payment workflow. It should be to determine where they can deliver a meaningfully better outcome for customers and complement existing payments infrastructure.

Banks Should Focus on Participation Models
Financial institutions continue to benefit from trusted brands, regulatory expertise, customer relationships and access to deposits. However, these advantages do not automatically ensure that portions of the value chain will remain within the banking system as stablecoins gain traction.

As a result, banks should begin by defining participation models rather than making technology decisions. The question where each institution can create defensible value.

A small number of large institutions may choose to issue tokenized deposits or bank-backed stablecoins as they seek to extend their role as issuers of money into digital environments. While this approach offers greater control, it also requires significant investment in technology, liquidity management and compliance capabilities.

Many banks will likely pursue a different path, enabling stablecoin activity through custody, wallet services, fiat on- and off-ramps or compliance infrastructure. Others may focus on becoming orchestration layers that connect customers to multiple payment rails.

These approaches are not mutually exclusive, but they require different capabilities, investment levels and risk tolerances. The near-term objective should be to determine where the institution can create sustainable value if stablecoins become a more common part of financial infrastructure.

That remains an early exercise for much of the industry. S&P Global Market Intelligence’s Q1 2026 US Bank Outlook survey found that among 100 primarily smaller U.S. financial institutions, just 7% are developing internal frameworks for stablecoins, and none reported actively piloting capabilities. While a wait-and-see posture is understandable, developing a point of view and identifying potential participation models are increasingly becoming strategic necessities.

Start With Readiness, Not Deployment
While most banks remain in the earliest stages of evaluating stablecoins, now is the time for building organizational readiness. That starts with assigning ownership. Stablecoins often sit at the intersection of payments, treasury, technology and innovation teams, creating ambiguity around responsibility. Without a designated owner, institutions frequently remain trapped in observation mode.

Leadership teams should also engage core providers, payment partners and technology vendors to understand how stablecoin capabilities may be incorporated into future roadmaps. As with real-time payments, infrastructure modernization will be a prerequisite for success.

The Strategic Question Is Shifting From “If” to “Where”
The stablecoin landscape is still new, and significant uncertainties persist around regulation, adoption and economics. Even so, the trajectory is becoming clearer. Stablecoins are quickly establishing relevance in functions that sit close to the core of modern banking.

For bank executives, the challenge is no longer determining whether stablecoins matter. It is determining where their institution fits within an emerging ecosystem that is gradually reshaping how money moves.

The banks that answer that question early will be in a stronger position to defend core franchises, identify new revenue opportunities and adapt to customer needs as stablecoins become increasingly embedded in financial infrastructure.