Regulatory uncertainty surrounding stablecoins may disadvantage traditional banks more than cryptocurrency firms, according to financial industry experts. Major banks have built digital asset infrastructure but cannot fully deploy it without clear classification rules. Meanwhile, a significant yield gap between stablecoin platforms and traditional savings accounts could accelerate deposit migration, especially among certain client segments.
Regulatory ambiguity around stablecoins could place traditional banks at a greater disadvantage than crypto companies, according to Colin Butler, an executive at Mega Matrix. He stated that banks have invested heavily in digital asset infrastructure but remain unable to deploy it while lawmakers debate classification.
“Their general counsels are telling their boards that you cannot justify the capital expenditure until you know whether stablecoins will be treated as deposits, securities, or a distinct payment instrument,” Butler said. Several major banks, including JPMorgan, BNY Mellon, and Citigroup, have already developed parts of the needed infrastructure.
Crypto firms have operated in regulatory gray zones for years and would likely continue doing so. “Banks, by contrast, cannot operate comfortably in that gray area,” Butler added. Another concern is the growing difference between returns available on stablecoin platforms and traditional bank accounts.
Exchanges often offer between 4% and 5% on stablecoin balances, while the average U.S. savings account yields less than 0.5%. Butler noted that depositors move quickly when higher yields become available, a process that could now happen faster. Fabian Dori of Sygnum said the competitive gap is meaningful but not yet critical for a large-scale deposit flight.
“But the asymmetry can accelerate migration at the margin, especially among corporates, fintech users, and globally active clients already comfortable moving liquidity across platforms,” Dori stated. Butler also warned that attempts to restrict stablecoin yield could unintentionally drive activity into less regulated areas or alternative structures like synthetic dollar tokens.
He argued that capital seeks returns and broader restrictions could push more funds into opaque offshore structures. This outcome would contradict regulatory intentions by reducing consumer protections. The current U.S. law prohibits stablecoin issuers from paying yield directly to holders, but exchanges can offer returns through other programs.
