Banks Explore Stablecoin Adoption Amid Market Share Concerns

Traditional financial institutions are accelerating their exploration of stablecoins as regulatory clarity emerges in the U.S. and competition intensifies. "A lot of banks are just being defensive—they’re afraid they’re going to lose their deposits," said Ben Reynolds, BitGo’s managing director of stablecoins, during a Consensus 2025 panel in Toronto. The trend reflects growing institutional anxiety about being sidelined by digital dollar alternatives.

BitGo’s stablecoin-as-a-service platform has reported surging demand from both domestic and international banks seeking to tokenize deposits or issue their own stablecoins. Yield-bearing stablecoins and tokenized money market funds, while still a niche segment, are driving much of this activity as banks scramble to modernize their offerings.