Stablecoins Are Rewriting the Rules—Will Your Bank Keep Up?

Michael Johnson · 2026-10-22

Moving money across borders has always been a headache. You're dealing with a maze of intermediaries, delays, fees, and a serious lack of visibility. Stablecoins offer a different way: transparent, real-time, low-cost payments that work globally. These digital assets have evolved from a niche crypto experiment into a key part of the global payments landscape. Many banks have spent years watching from the sidelines. But that's becoming harder to justify. Stablecoins are now regulated financial infrastructure, and they're starting to reshape how money moves around the world. ### The Wake-Up Call for Banks In a recent PaymentsJournal webinar, Simon Griffin (Business Lead for Crypto Distribution at SoFiUSD) and Chris Kennedy (SVP and Head of Enterprise Payments at Regions Bank), along with moderator Ritesh Rihani (VP of Global Banking at SoFi Tech Solutions), talked about how stablecoins intersect with banking infrastructure. They discussed the roles banks can play and how institutions can approach payments modernization. The key takeaway: banks can no longer afford to stay on the sidelines. They face a decision point—how to participate in the emerging digital ecosystem while keeping customer relationships, regulatory compliance, and profitability intact. ### Keeping Deposits in the Ecosystem A stablecoin is a digital asset on a blockchain designed to maintain stable value. Most are pegged to a traditional fiat currency—usually the U.S. dollar. Digital dollars have many use cases, and cross-border payments are one of the most promising. The traditional correspondent banking model is complex: multiple banks, payment rails, regulatory requirements, and currency conversions. Stablecoins can eliminate many of these pain points. But when customers use stablecoins today—for both cross-border and domestic payments—they typically do so outside their primary financial institution. "Banks have a deep, valid concern," Kennedy said. "They don't want their clients to leave and go to a different competitor network. Two, if those deposits leave and go to a coin, they aren't getting yield, they aren't getting reserves, and they can't transact—they lose all those capabilities." "They want to keep the money in the ecosystem," he added. "The natural defense mechanism you see is banks developing their own network." That's why tokenized deposits are gaining interest. Like stablecoins, tokenized deposits are digital assets representing real money. The difference is that tokenized deposits represent funds held within the regulated banking system. This compliance-friendly model is attractive to banks, and a growing number of platforms support tokenized deposits, including solutions from industry consortiums and leading financial institutions. But these networks aren't a one-to-one replacement for stablecoins. ### The Permissioned vs. Permissionless Debate "Fundamentally, the bug with all of those networks is that they are permissioned by nature," Griffin said. "There's a walled garden fencing in who can send and receive those digital assets, and which financial institutions can participate. One of the features of blockchain technology is that some networks are permissionless by nature. That enables you to move this money 24/7 to basically anyone in the world." "On one hand, you've got this permissionless, near-free-of-charge service that I can use to move dollars anywhere in the world," he said. "On the flip side, I have a permissioned walled garden approach which only allows me to move between participants within the network." So what's a bank to do? The answer isn't simple, but the conversation is shifting from "if" to "how." Institutions need to weigh the benefits of open, global reach against the control and compliance of closed networks. ### What This Means for Your Business If you're in business, you should pay attention. Stablecoins aren't just a crypto curiosity anymore—they're a payments revolution. Banks that adapt will keep deposits and customers. Those that don't risk losing them to nimble competitors. Here are a few things to consider: - **Evaluate your cross-border payment flows.** Are you losing time and money to intermediaries? Stablecoins could offer a faster, cheaper alternative. - **Talk to your bank.** Ask how they're planning to integrate stablecoins or tokenized deposits into their offerings. - **Stay informed.** The regulatory landscape is evolving quickly. What's allowed today might be different tomorrow. The bottom line: stablecoins are here to stay. The question is whether your financial institution will evolve with them or get left behind. > "The natural defense mechanism you see is banks developing their own network." — Chris Kennedy, Regions Bank