Banks accelerated integration of stablecoins in 2025 as a strategic move to modernize payments, manage liquidity and capture new revenue, even as mass retail use remains distant. Stablecoins have become a focus for wholesale, interbank and B2B flows, supported by regulatory steps such as the GENIUS Act (enacted July 2025) and regional frameworks, and by industry alliances that include major banks and payment processors.
Financial institutions are deploying stablecoins to solve immediate operational frictions: 24/7 settlement, faster cross‑border transfers and programmable money for treasury and custody operations. Major banks are building rails and pilots; one large example is JPMorgan’s Kinexys initiative expanding JPM Coin and planning to open its rails to external partners in 2025.
Industry partnerships include FIS and Fiserv working with a prominent issuer to enable movement of tokenized USDC and EURC for financial institutions, while forecasts cited by industry research range from $500 billion to $4 trillion in stablecoin market capitalization by 2028, reflecting divergent scenarios for institutional uptake.
This institutional push is pragmatic rather than speculative. Four out of five institutions are reportedly already using or exploring stablecoins, driven by efficiency gains and the hunt for payments market share versus fintech challengers. Banks also see tokenized deposits and regulated stablecoins as a way to integrate traditional safeguards—reserves, AML/KYC—into digital rails, with tokenized deposits defined as bank-issued digital representations of deposit balances on a blockchain used for settlement and treasury within institutional ecosystems.
Institutional drivers and market metrics for stablecoins
Despite institutional momentum, retail adoption lags on multiple fronts. Consumer surveys show persistent trust gaps and misunderstandings: about 42% of respondents view stablecoins as volatile, while substantial majorities want regulatory protections—77,4% seek conventional regulation and 66,3% want FDIC‑style insurance.
Network effects remain a hurdle, as more than half of consumers require broad merchant acceptance before considering use, and illicit-use concerns add regulatory pressure with data referenced from Chainalysis pointing to stablecoins accounting for roughly 63% of illicit crypto transaction value.
Regulatory clarity has progressed for institutions but does not guarantee rapid retail uptake. The GENIUS Act (July 2025) introduced federal rules for payment stablecoins including 100% reserves and stricter AML/KYC, and Europe’s MiCA framework came into effect in mid‑2024.
Banks’ 2025 push into stablecoins reflects an institutional-first adoption curve: they target immediate operational and competitive benefits while retail reach remains constrained by trust, merchant acceptance and regulatory complexity. For market operators, the shift implies changing intraday liquidity patterns and new counterparty exposures without an immediate retail demand shock.
