Will stablecoins disrupt the banking infrastructure?
What is it about stablecoins that has everyone talking? Are they disruptive? Will they destabilise the banking infrastructure or simply modernise it? In this article, we examine how stablecoins are influencing global finance, from payment systems to monetary policy and sovereign debt.
Money has been reinvented many times, from metal coins to paper bills to online banking. Stablecoins are the latest version: a digital currency that behaves like money, but moves at the speed of cryptocurrency.
What are stablecoins?
Stablecoins are digital currencies designed to maintain a stable value by being pegged to assets, most commonly fiat currencies like the US dollar. Unlike volatile cryptocurrencies such as Bitcoin and Ethereum, which can go up and down in value within hours, stablecoins combine the stability of traditional assets with the technological advantages of the blockchain.
Why stablecoins matter
Stablecoins challenge the current payment infrastructure. Today, cross-border payments are typically slow and costly. They often involve multiple intermediaries, fees and currency conversions that can take days to settle. Stablecoin transactions happen instantly, operate globally, are available 24/7, and can easily be converted into other currencies. Take, for instance, a freelancer in Asia working for a US-based company. Instead of waiting days for a wire transfer and losing money to conversion fees, they could be paid in US dollars, converted into stablecoins, and then exchanged into the local currency within minutes. Furthermore, in regions where access to physical bank branches or ATMs is limited, stablecoins provide an alternative for storing value and conducting transactions securely.
Industry analysts foresee that stablecoin usage will explode in the coming years. Citigroup estimates stablecoin-related transactions could reach USD 1.9 trillion by 2030.1 When that happens, payment giants like Visa, Mastercard, PayPal, but also banks will be forced to adapt and provide (international) transactions at much lower fees. This will ultimately mean that the boundaries between crypto and traditional finance are beginning to blur.
“Stablecoin issuers buying Treasuries is a fiscal gift for the US government. At a time when deficits are ballooning and borrowing costs are rising, stablecoins decrease borrowing costs by driving demand for short-term Treasuries.”
Richard de Groot – Head Global Investment Centre
A new buyer in the bond market
Perhaps the most consequential development is stablecoins becoming a new, non-traditional source of demand for US government debt. With the passage of the GENIUS Act in July, signed into law by US President Donald Trump, stablecoin issuers are now required to back their tokens with 100% reserves in liquid assets, primarily US dollars and short-term Treasuries. This means that stablecoin issuers must hold reserves that match the full value of the tokens they have in circulation.
This has turned stablecoin issuers into significant players in the Treasury market. Tether, the largest issuer, now holds over USD 127 billion in US government debt2, making it one of the largest private holders globally3. As demand for stablecoins grows, so too does the demand for Treasuries. The result? A downward pressure on yields, similar to a small quantitative easing programme4 5, but without the central bank.
For the US government, this is a fiscal gift. At a time when deficits are ballooning and borrowing costs are rising, stablecoins decrease borrowing costs by driving demand for short-term Treasuries.
Europe’s digital deficit
Across the Atlantic, Europe is falling behind. While the European Central Bank (ECB) explores central bank digital currencies (CBDCs), and a consortium of European banks is working on a euro-backed stablecoin, Europe is struggling to keep pace in the digital currency race.
ECB President Christine Lagarde has warned of risks to financial stability and monetary policy, but the issue is not the stablecoins themselves. The real concern is that if the global financial system increasingly relies on US-backed digital assets, the ECB’s ability to influence inflation and monetary conditions weakens, while the worldwide position of the euro will decrease. Therefore, Europe needs a euro-denominated alternative to preserve its economic autonomy.
“Concerns about financial stability often stem from the fact that most stablecoins are backed by US dollar reserves. We see this differently. Stablecoins are pegged to an underlying asset, typically the US dollar, which represents their value. The real risk arises if investors begin to question the value of the underlying asset itself.”
Ralph Wessels, Chief Investment Strategist ABN AMRO MeesPierson
Are stablecoins a risk to financial stability?
No. Their integration into traditional finance remains limited, and if a major stablecoin issuer were to mismanage its reserves or face a run, the effects would mostly be felt in the crypto market. Concerns about financial stability often stem from the fact that most stablecoins are backed by US dollar reserves. We see this differently. Stablecoins are pegged to an underlying asset, typically the US dollar, which represents their value. The real risk arises if investors begin to question the value of the underlying asset itself. In that case, dollar-backed stablecoins could be compromised.
Do we recommend investing via stablecoins?
No. Stablecoins are not without risk. Most lack deposit insurance, regulatory clarity and consumer protections. Issues like fraud, hacking and booking errors remain real threats. Therefore, ABN AMRO does not recommend investing via stablecoins and maintains a preference for traditional investments. You can find our views on those asset classes in the article Opportunities.
Conclusion
Stablecoins are gaining attention, but we believe there is still a long way to go before they become a widely adopted solution in everyday financial infrastructure. They are rarely used as payment infrastructure in traditional finance today, and challenges and risks remain. Whether stablecoins evolve into mainstream payment instruments will depend on how regulators, banks and issuers tackle these challenges.
1 Source: Citigroup. (2025). Stablecoins 2030: Web3 to Wall Street.
2 Source: Tether.io. Q2 2025 Attestation Report
3 Tether has faced criticism over the absence of independent third-party audits of its reserves.
4 Source: Bank for International Settlements. (2023). The footprint of dollar-backed stablecoins in US Treasury markets. https://www.bis.org/publ/work1270.pdf
5 A quantitative easing program is a monetary policy tool used by central banks to stimulate the economy by purchasing government securities or other assets to increase liquidity in the financial system and lower interest rates.
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