Stablecoins are no longer a fringe market. Their total supply exceeded $300 billion, and USDT₮, the largest stablecoin, briefly overtook Ethereum in market capitalization to become the second-largest digital asset behind Bitcoin. Banks are right to pay attention to this.
But paying attention is not the same as pressuring Congress to slow the market.
Stablecoins create new competition around payments, settlement, floating and customer relationships. Some of this competition will be uncomfortable for banks. This should be the case. Fintech doesn’t advance only when incumbents feel comfortable.
This does not make stablecoins a systemic threat to community banks.
There is precedent for this. Over the past decade, fintech companies have integrated banking features into consumer apps, commerce platforms, payroll tools, lending products and payment systems. Many did so through banking partners. This changed the way customers interacted with financial services. This created new competition. This pushed banks to modernize. But that didn’t make community banks disappear.
Fintech apps like PayPal and Stripe have popularized digital banking and built large user bases since their emergence. However, banks have never treated fintech as a threat, but rather as an opportunity to expand their offerings and improve user experience through collaborations and integrations. Looking just at the numbers, SoFi, the largest publicly traded fintech bank, had $37.5 billion in total deposits as of the final quarter of 2025, representing less than 0.2% of the U.S. bank’s $20 trillion deposit base. If fintech was never a threat, why treat stablecoins any differently?
