Points of Focus

• Coinbase says stablecoins could help nearly 4,000 community banks compete with Wall Street giants.
• The report found no meaningful link between stablecoin growth and community bank deposit outflows.
• Fiserv, Visa, and Cross River are lowering the cost of stablecoin adoption for smaller banks.

Coinbase Institute said stablecoins could help thousands of US community and regional banks compete with Wall Street’s largest financial institutions by expanding access to payment infrastructure previously available only to the biggest banks. In a report published on July 15, the institute argues that shared blockchain settlement networks are lowering the technology barriers that have historically favored megabanks.

The report said nearly 4,000 community and regional banks could use stablecoin networks to offer 24/7 payments, faster cross-border transfers, and programmable treasury services without investing in costly proprietary infrastructure. It added that providers such as Fiserv, Visa, and Cross River Bank are making those capabilities more accessible, allowing smaller banks to adopt those services without building the underlying infrastructure themselves.

The impact of stablecoins on small banks has received a lot of attention, but not for the right reasons.

Let’s recap: Multiple empirical studies have found no meaningful link between stablecoin growth and bank deposits. As USDC grew to ~$75B, overall bank and community bank… pic.twitter.com/RCYrfRLzGE

— Faryar Shirzad 🛡️ (@faryarshirzad) July 16, 2026

Coinbase report challenges stablecoin deposit concerns

The report also pushes back against one of the banking sector’s main criticisms of stablecoins. Coinbase cites research from the White House Council of Economic Advisers, Charles River Associates, and Cornell professor Lin William Cong, all of which found no statistically significant relationship between stablecoin adoption and community bank deposit outflows.

Coinbase said recent market data also supports that conclusion. As USDC’s (USDC) market capitalization expanded to roughly $75 billion over recent years, deposits at community banks also increased. The report added that Coinbase has offered USDC rewards for more than four years without observing a measurable decline in bank deposits. It also references a 2024 UCLA study showing that 70%-80% of US bank deposits remain relatively insensitive to changes in yield.

Stablecoin infrastructure lowers barriers for smaller banks

The report argues that stablecoins are changing banking economics by replacing expensive proprietary payment systems with shared blockchain infrastructure. That could allow smaller institutions to process real-time domestic and international payments, support tokenized asset settlement, and expand treasury services without maintaining correspondent banking networks or large in-house engineering teams.

The report comes as financial institutions expand stablecoin payment initiatives amid growing interest in blockchain-based settlement. Payment companies, banks, and fintech companies have rolled out new products and partnerships over the past year to support faster cross-border payments and tokenized asset settlement.

The report reflects Coinbase Institute’s assessment rather than an industry-wide consensus. Banking industry groups have continued to argue that wider stablecoin adoption, particularly products offering rewards, could place pressure on deposits if usage expands substantially, an issue that continues to feature in US stablecoin legislation and regulatory discussions.