Colin Butler argues stablecoin payments—not trading—pose the real deposit risk to banks as on-chain money enters everyday finance.
Colin Butler is EVP, Capital Markets and Head of Global Financing at Mega Matrix.
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As stablecoins gain traction, we are looking at a $500 billion exodus.
That is the amount of capital Standard Chartered estimates could flow out of bank accounts into stablecoins by the end of 2028. For banks, particularly the smaller regional ones that run on consumer deposits to fund loans, that number represents a massive, structural risk.
But banks are misdiagnosing the problem.
The threat to bank deposits is not crypto trading. It is stablecoins becoming payment instruments in the everyday economy. As stablecoins start being spent on real goods, they move from a speculative asset to a direct competitor with the traditional bank deposit.
Banks are right to be worried. Holding interest-bearing stablecoins tempt consumers to keep their savings and spend money outside the banking system. When platforms like Coinbase offer yields up to 3.5% yield as “rewards,” the incentive to leave the bank becomes mathematical, not ideological.
Fear of the crypto trading market size, however, is misplaced. Even with stablecoin transaction volumes surging to $33 trillion in 2025, trading remains volatile and cyclical. It comes and goes. Payments don’t. That persistence makes the deposit risk real.
Payments change everything
For the past decade, stablecoins behaved like financial plumbing. They were held on exchanges, posted as collateral, or parked between trades.
What changes once they are used for payments is not scale, but behavior.
As holders put their digital assets to work in the everyday world, they compete with checking accounts and savings accounts. And they have a distinct advantage. Aside from that yield on stored stablecoins, they make everything quicker. They settle instantly. There is no delay between depositing a check and it being cashed, Banks lose the time and the float they rely on to hold your money and earn interest on it themselves.
U.S. bank deposits will drop by one-third of stablecoin market capitalization, currently $310 billion, if the Standard Chartered estimates hold.
Everyday people
Yield is nice, but utility is the hook. The ability to use stablecoins for day-to-day expenses like rent and groceries is what actually attracts people.
And that is happening now. Spending on Visa- and Mastercard-branded stablecoin payments cards has already reached $18 billion annualized. This signals that stablecoins are being spent, not just held. Payments volumes are approaching parity with peer-to-peer stablecoin transactions.
From my vantage point, I estimate the stablecoin market could reach as much as $10 trillion in five to 10 years. Growing stablecoin payments are the engine behind that equation.
Deadly boring
Stablecoins are breaking out of their traditional uses in DeFi and crypto trading. They are moving into the far more dangerous realm (for banks) of boring transactions.
I see workers being paid in stablecoins. I see startups being funded in stablecoins. I see businesses paying suppliers without waiting days for correspondent banks to move funds. When that happens, banks lose their monopoly on everyday liquidity. These transactions use stablecoins to replace checking accounts. Crucially, they do so in a way that doesn’t make the users think they are “using crypto.”
Once businesses and individuals start transacting in money that settles near-instantly and is programmable, the old, accustomed frictions of banking start to feel less like business as usual and more like inefficiencies.
That is why crypto cards are so important now, while it is still difficult to transact directly in stablecoins. They can be spent anywhere Mastercard and Visa are accepted (nearly everywhere) without merchants needing to get new equipment. So, stablecoin transactions feel “normal”, even as they bypass the traditional banking system.
A slow leak
Banks are especially exposed because of where the money goes. Stablecoin issuers don’t keep more than a small fraction of their reserves in banks, instead choosing safe but yield-bearing instruments like Treasuries.
So, the funds that stablecoin users spend aren’t getting redeposited back into the system.
Regional banks rely on net interest margin, which is the difference between the income generated by a bank’s credit products and the interest paid to its deposit holders. They are most at risk. This is not a future risk. It is a slow leak that is already underway.
This explains why banks are currently fighting so hard to ban stablecoins from providing yield. They know the only effective way to compete is to offer similar interest rates on deposits. Doing that would break their historic funding model.
Payments are the wedge
As people increasingly pay in stablecoins, merchants and businesses will start accepting them directly in greater numbers. They will start using them increasingly in B2B. After all, stablecoins offer instant settlement and 24/7 availability. Banks keep bankers’ hours, rely on slower batch settlement, and create massive friction with international payments.
Businesses that accept stablecoins will start holding them. Those that hold them will start using them. Eventually, they will start managing treasury operations onchain. Payments pull stablecoins into circulation, but treasury operations will keep them there. As use scales, that migration will reshape the economics of both banks and payments.
What’s next
Payments are the wedge stablecoins will use to become embedded in corporate finance, treasury management, and settlement infrastructure. Payments are the crack in a foundation that will slowly crumble.
Banks are worried and rightfully so. As banks start to lose depositors, they will start losing control of other parts of the economy as well.
That is where the $10 trillion stablecoin market starts to come into view. Stablecoins grow into payments and then beyond into other, larger aspects of the global money market.
Payments are where stablecoins stop being crypto assets, and become real competition.
About the author
Colin Butler is EVP, Capital Markets and Head of Global Financing at Mega Matrix (NYSE: MPU), where he leads the company’s digital asset treasury strategy spanning stablecoins and tokenized fixed income. With 17 years in traditional finance, he is now executing one of the first stablecoin governance-token treasury strategies. He focuses on how capital markets tools and DeFi yield are reshaping next-generation digital asset treasuries. Previously, he worked on institutional adoption and capital markets at Polygon Labs.
