Viewpoint: Regulatory Uncertainty Around Stablecoins Could Put Banks at Greater Disadvantage, Deposits May Face Migration Pressure Due to Yield Gap

Odaily News Financial technology company Mega Matrix's Executive Vice President of Capital Markets, Colin Butler, stated that regulatory uncertainty surrounding stablecoins could put traditional banks at a greater disadvantage compared to crypto companies. He pointed out that many banks have invested significant capital in building digital asset infrastructure. However, until regulations clarify whether stablecoins will be treated as deposits, securities, or independent payment instruments, boards and compliance departments find it difficult to approve full-scale deployment. Currently, several major banks have initiated related initiatives, such as JPMorgan Chase's Onyx blockchain payment network, BNY Mellon's digital asset custody services, and Citigroup's testing of tokenized deposits. But Butler noted that regulatory ambiguity limits the scalable application of these investments, whereas crypto companies, having long operated in a gray regulatory environment, possess stronger adaptability.

Furthermore, the yield gap between stablecoin platforms and bank deposits could also drive capital migration. Butler mentioned that most trading platforms offer yields of around 4% to 5% on stablecoin balances, while the average U.S. savings account yield is below 0.5%. Capital tends to flow rapidly when higher yields appear. Butler also warned that if regulators restrict stablecoin yields, it might push capital towards structures with fewer regulations, such as synthetic dollar tokens like USDe that generate yield through derivative strategies, thereby directing capital to less transparent offshore markets.

Sygnum's Chief Investment Officer, Fabian Dori, believes that although the competitive gap between banks and crypto platforms is widening, the possibility of large-scale deposit outflows in the short term remains limited. However, he noted that once stablecoins are perceived as yield-generating digital cash, bank deposits will face more pronounced competitive pressure. (Cointelegraph)