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Banks Face More Stablecoin Risk Than Crypto Firms, Says Expert

Traditional banks may be more exposed to stablecoin regulatory uncertainty than crypto companies, according to Colin Butler, executive vice president of capital markets at Mega Matrix. Butler told Cointelegraph that financial institutions have already spent heavily on digital asset infrastructure. That spending cannot be fully deployed until regulators decide whether stablecoins qualify as deposits, securities, or a separate class of payment instrument. #stablecoins

Several major banks have made meaningful commitments in this space. JPMorgan built its Onyx blockchain payments network. BNY Mellon launched a digital asset custody service. Citigroup tested tokenized deposits internally. "The infrastructure spend is real, but regulatory ambiguity caps how far those investments can scale," Butler said. #banks

#Risk and compliance teams at these institutions will not approve full deployment without a defined regulatory classification, Butler explained. Crypto firms, by contrast, have operated in unresolved regulatory environments for years and are accustomed to continuing under those conditions. Banks do not have the same operational #flexibility.

Fabian Dori, chief investment officer at Swiss digital asset bank Sygnum, said the competitive gap between banks and crypto platforms is real but not yet at a critical level. He said a sudden large-scale shift of deposits from banks to stablecoin platforms is unlikely in the short term. Institutions still weigh trust, regulatory standing, and operational resilience when deciding where to hold liquidity. #DeFi

The yield difference between platforms is a growing pressure point. Crypto exchanges commonly offer between 4% and 5% returns on stablecoin balances. The average U.S. savings account currently yields below 0.5%.