Overview
- In a new paper published Tuesday, Coinbase policy chief Faryar Shirzad rejects warnings from banking groups of up to $6 trillion in deposit flight, calling “deposit erosion” a myth tied to protecting a $187 billion swipe‑fee business.
- He contends stablecoins are used for transactions and settlement rather than long‑term savings, so buying tokens to pay overseas invoices is not equivalent to withdrawing bank deposits.
- Coinbase cites a roughly $290 billion stablecoin market and projections nearer $2 trillion, arguing that such figures are inconsistent with multi‑trillion outflow scenarios and noting banks still park about $3.3 trillion at the Federal Reserve.
- The company points to IMF‑cited data indicating that over half of last year’s $2 trillion in stablecoin transactions occurred in emerging markets, which it says supports U.S. dollar usage abroad.
- Regulatory scrutiny is intensifying as the Financial Times reports the Bank of England is considering caps on holdings of “systemic” stablecoins, with possible limits of £10,000 for individuals and around £10 million for businesses.