Moody's: Stablecoins Unlikely to Threaten Banks in Near Term

The banking sector’s exposure to stablecoins remains modest for now, but analysts say the landscape could tilt as the sector of stablecoins and tokenized real-world assets (RWAs) swells in market size. While adoption is still evolving, the on-chain payments and cross-border use cases are broadening, potentially reshaping how traditional banks compete with a new class of digital assets.

According to Abhi Srivastava, associate vice president of Moody’s Investors Service Digital Economy Group, the stablecoin market capitalization exceeded $300 billion by the end of last year. Cointelegraph’s coverage highlights that figure as a marker of rapid growth, even as everyday usage lags behind headline numbers. (Source: Cointelegraph)

Srivastava noted that the role of stablecoins in payments, cross-border commerce, and on-chain finance is expanding, even as today’s U.S. payment rails remain fast, low-cost, and trusted. He argues that near-term disruption risk to banks appears limited, particularly given policy constraints that currently bar yield-bearing stablecoins from paying yields—meaning they are unlikely to replace traditional deposits domestically in the near term.

Nonetheless, the report suggests that sustained growth in stablecoins and tokenized RWAs could exert pressure on banks over time, potentially driving deposit outflows and constraining lending capacity as more financial assets migrate onto the blockchain or into tokenized forms.

The policy debate around stablecoins has become a focal point for crypto executives and bankers alike, especially as concerns grow that yield-bearing stablecoins could erode traditional banking market share. This tension is playing out in broader regulatory discussions in Washington, where the CLARITY Act—officially the Digital Asset Market Clarity Act of 2025—seeks to deliver a formal taxonomy and regulatory oversight for crypto markets. Source: Cointelegraph.

CLARITY Act stalled, as banks push back on yield-bearing stablecoins

The CLARITY Act aims to establish a comprehensive framework for digital assets, including asset taxonomy and regulatory jurisdiction. It has stalled in Congress after a coalition of crypto companies, led by Coinbase, publicly opposed earlier drafts, citing concerns over open-source software protections and a prohibition on yield-bearing stablecoins. The clash underscores a broader negotiation between the crypto industry and the banking lobby over how far regulators should go in defining and controlling digital-asset activities.

Lawmakers and the White House have pursued negotiations to bridge the gap, but concrete compromises remain elusive. Earlier this month, North Carolina Senator Thom Tillis signaled plans to release an updated draft proposal that could address concerns from both sides; Politico reports the plan exists, though no public draft has been released at this time. Source: Politico.

Analysts warn that a failure to pass a clear regulatory framework could invite renewed or stricter regulatory crackdowns on the crypto sector in the years ahead. With the CLARITY Act at a critical juncture, market participants are watching not only its fate but also how lawmakers weigh stability, innovation, and consumer protection in a rapidly evolving ecosystem. For some observers, the risk is not only about a single bill failing to pass but about the signaling effect of regulatory gridlock on market development and institutional participation.

What to watch next for stablecoins and market structure

As the debate progresses, investors and builders should monitor how stablecoins evolve in payments and cross-border use, and how tokenized RWAs intersect with traditional banking services. The outcome of the CLARITY Act negotiations, along with any new proposals from lawmakers such as Tillis, will influence not just compliance requirements but the pace at which banks and fintechs collaborate or compete with on-chain financial instruments. The broader question remains: will a clear regulatory framework unlock wider institutional adoption of stablecoins, or will it slow the pace of innovation through tighter restrictions?

Readers should stay attuned to updates from Congress and major industry voices, as the balance between fostering innovation and ensuring financial stability will shape the trajectory of stablecoins, RWAs, and the crypto market’s interaction with traditional banking in 2025 and beyond.

What remains uncertain is how quickly a consensus will emerge on yield-bearing stablecoins and related products, and how any new framework will translate into practical rules for exchanges, issuers, and users. The coming weeks could offer critical signals about the sector’s path and the readiness of policymakers to align on a shared approach to digital assets.

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