Coinbase Dismisses Banks’ Concerns Over Stablecoins as Overblown

Coinbase's Faryar Shirzad dismisses banks' stablecoin fears as unfounded.

The fear among American banks that stablecoins will “absorb” their deposits is unfounded and overlooks the actual potential uses of these assets, according to Coinbase’s Head of Policy, Faryar Shirzad.

The “stablecoins will destroy bank lending” narrative ignores reality. U.S. banks are sitting on trillions in reserves—they have plenty of liquidity. Meanwhile, most stablecoin demand comes from outside the U.S., expanding dollar dominance globally, not competing with your local… pic.twitter.com/3wCOEm6Zr0

— Faryar Shirzad 🛡️ (@faryarshirzad) October 29, 2025

“The idea that stablecoins will destroy bank lending ignores reality. U.S. banks have trillions in reserves—they have plenty of liquidity,” he noted.

Shirzad also added that most demand for stablecoins comes from other countries. This strengthens the dollar’s dominance globally rather than creating competition with local financial institutions.

In his view, stablecoins “serve the same function for payments as money market funds do for savings—stimulating innovation through competition.”

Faster, cheaper, and programmable transactions do not pose a threat; lending will not disappear but will evolve and expand into private business and fintech, according to the Coinbase executive.

“Public banks and stablecoin holders hardly overlap, although banks could enhance their services with stablecoins. Viewing them as a threat is a misunderstanding of the moment: ‘stablecoins’ bolster the global role of the dollar and open competitive opportunities,” he emphasized.

In a separate report, Coinbase researchers noted that even if the global circulation of stablecoins reaches $5 trillion, most of this value will still be held abroad or locked in digital settlement systems, rather than withdrawn from U.S. accounts.

The volume of deposits in American commercial banks exceeds $18 trillion, so the impact of digital assets “will remain insignificant, while the global dominance of the U.S. dollar will multiply.”

In October, the payment company Visa expanded its settlement capabilities by adding support for four stablecoins on four different blockchains.