Banks are approaching stablecoins cautiously despite rapid market growth, reflecting a startup strategy and growing structural concerns, according to a report from S&P Global Market Intelligence.
According to Wednesday’s report, the question is no longer whether stablecoins will endure, but how they will reshape economic models, infrastructure and revenues. For banks, the trade-offs are difficult, covering deposit risk, modernization costs and new competition.
The wait-and-see attitude still dominates. S&P Global’s survey of U.S. bank outlooks for the first quarter of 2026 finds that just 7% of 100 mostly small institutions are developing frameworks, with none actively driving them, underscoring how exploratory strategies remain.
“Most financial institutions remain early and cautious,” Jordan McKee, director of fintech research at S&P Global Market Intelligence, said in emailed comments. “Our survey of U.S. banks shows that the stablecoin strategy is still largely exploratory, with limited internal development and no active pilots among smaller institutions.”
Stablecoins, digital tokens linked to assets such as fiat currencies or commodities, have become an essential layer for crypto payments and settlements, widely used in cross-border exchanges and flows. The market is dominated by Tether’s USDT, followed by Circle Internet’s USDC (CRCL).
The stablecoin market has rapidly grown into a roughly $300 billion industry, with total market capitalization surpassing $316 billion in early 2026 after nearly doubling since 2023, according to multiple data sources.
Transaction volumes have also reached tens of billions per year, highlighting growing use in cross-border trade, payments and transfers, while forecasts indicate continued expansion, potentially reaching $500 billion or more in the near term, as institutional adoption accelerates.
The pressure is mounting. The report highlights growing concern over deposit cannibalization and customer migration, alongside an increase in mentions of stablecoins during earnings calls following the passage of the GENIUS Act in July 2025.
Competition is also intensifying. S&P Global highlighted a wave of non-banks seeking to house the issuance, custody and settlement of stablecoins within regulated entities, thereby positioning themselves as credible alternatives.
Banks are also wary of yield-type incentives in stable ecosystems that could compete with deposits, even if direct interest payments remain limited.
The answers will differ. S&P Global analysts expect major global banks to consider issuing tokenized deposits or bank-backed digital assets, while regional and mid-sized lenders focus on facilitating access via fiat on-ramps. Regardless of the strategy, banks will remain key bridges between fiat and stablecoin networks, but this will require significant upgrades to existing systems that are poorly suited to real-time digital asset activity.
Cross-border banks face the biggest push for modernization as payments move to multi-rail systems combining traditional, real-time and tokenized networks. Wallet interoperability and infrastructure will be key, with large banks building multi-network connectivity and small businesses leveraging fintech partners. Secure custody and built-in compliance should become the norm, the report adds.
Learn more: Stablecoin Rewards Restrictions May Slow But Not Stop Circle’s USDC, Says Citigroup
