A new analysis from Moody's Investors Service concludes that stablecoins currently present a "limited" short-term disruption risk to the traditional banking sector, despite the stablecoin market capitalization exceeding $300 billion at the end of 2025. The assessment, provided by Abhi Srivastava, associate vice president of Moody’s Digital Economy Group, highlights that existing U.S. rules prohibiting stablecoins from paying yield make them unlikely to replace traditional bank deposits at scale in the near term.
The report points to the competitiveness of established U.S. payment systems, which are described as "fast, low-cost and trusted," as a key factor insulating banks. However, Srivastava warns that over time, growing adoption of stablecoins and the expansion of tokenized real-world assets (RWAs) could place significant "pressure" on the banking sector, potentially leading to deposit outflows and a reduced capacity for lending.
The analysis arrives amid a stalled legislative effort in Congress to establish comprehensive crypto regulation. The Digital Asset Market Clarity Act of 2025 (CLARITY Act), a proposed market structure bill, is currently held up. A major point of contention has been a prohibition on yield-bearing stablecoins, which the banking sector fears could erode its market share. Crypto industry companies, led by Coinbase, have opposed earlier drafts of the bill, citing this prohibition and a lack of legal protections for open-source developers.
While North Carolina Senator Thom Tillis has indicated plans to release an updated draft acceptable to both the crypto industry and bank lobbyists, the bill has reportedly faced pushback and has not yet been made public. The Moody's report underscores that the future regulatory landscape, particularly the fate of the CLARITY Act, represents a critical uncertainty that will shape the long-term competitive dynamics between stablecoins and traditional finance.
