Stablecoin issuers such as Tether and Circle operate a business model that relies less on transaction fees and more on the yield spread generated by massive holdings of U.S. sovereign debt. Under the fiat-backed issuance model, the companies channel most of their reserves into short-term U.S. Treasury bills. These instruments provide liquidity for redemptions while accruing institutional interest, and the issuers retain all of the coupons generated by the collateral. Token holders receive a digital dollar at face value but do not participate in the underlying yield.
The structure exposes issuer profitability to Federal Reserve policy. On a $100 billion reserve portfolio, a one-percentage-point move in benchmark rates changes gross annual yield by about $1 billion. If rates fall, issuers may need to accelerate token adoption and transaction scale to offset margin compression, making blockchain payment rails high-volume distribution channels whose economics remain tied to the traditional macro cycle.
That macro backdrop coincides with a new distribution push. On September 10, Coinbase announced a partnership with payments platform Moov that lets community banks and credit unions offer stablecoin services through their existing business relationships. Moov will integrate Coinbase's stablecoin payments infrastructure into its platform for financial institutions. Coinbase said its CDP Custodial Wallet accounts will provide fund custody and its Payments API will orchestrate stablecoin movement. Moov will connect those functions to its bank and credit-union customers.
Moov CEO Wade Arnold framed the demand in simple terms: business customers that want to accept stablecoins currently go outside their primary financial institution. The arrangement would make stablecoin access appear inside the institution's existing payments experience. Moov says it has a customer base of more than 1,000 community banks and credit unions, but live, contracted and pilot institutions were not quantified, and no implementation timetable was given.
The disclosed split leaves Coinbase with a material infrastructure role: banks own the primary customer interaction, Moov supplies the payments-platform connection, and Coinbase provides crypto custody and movement components. However, supported stablecoins, networks, custodial-balance ownership, fiat settlement routes, fees, revenue sharing, transaction-data access, compliance duties and liability remain unspecified. Whether the bank retains economics and practical control will be determined by actual deployments.
Regulatory treatment is also in focus. In an April 2026 proposed rule, the FDIC said deposits held at banks as reserves for a payment stablecoin would be insured as corporate deposits of the stablecoin issuer, with no pass-through deposit insurance for stablecoin holders. A tokenized deposit that meets the statutory definition of a bank deposit remains a deposit, while a payment stablecoin represents a different legal claim. A Federal Reserve analysis from December 2025 added that stablecoins can reduce, recycle or restructure deposits depending on who buys them, what assets are converted and where issuers place reserves.
For community banks, the Moov arrangement places both possibilities in one product design. They may keep the customer conversation and gain a stablecoin service without building their own crypto stack, while Coinbase may gain transaction and custody activity. The first bank deployments, adoption counts, supported assets, account ownership and settlement paths will reveal how much of the payment relationship and balance-sheet value remains with the bank.
