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Stablecoins may not drain banks of dollars but they can still make lending more expensive

Here's a hypothetical scenario: you want to use $100 out of your bank account to buy newly issued stablecoins. The company issuing the stablecoins takes your dollars, puts them in its own bank account, and gives you a balance you can send around on a blockchain.

Andjela RadmilacCryptoSlate · October 4, 2026 · 4h ago

Key points

  • The article uses a hypothetical $100 stablecoin purchase to show how household deposits can return to banking as issuer deposits with a different owner.
  • It cites BIS 2026 analysis and Fed research arguing such conversion turns retail funding into wholesale funding, potentially weakening banks' funding dependability under Basel's Liquidity Coverage Ratio.
  • The piece notes reserve composition matters, as Treasury purchases shift deposits differently depending on whether the seller is a nonbank investor, a bank, or the Treasury.

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