Regulatory uncertainty around Stablecoin frameworks could disadvantage traditional banks more than crypto firms as lawmakers continue debating how such assets should be classified.
Colin Butler, executive vice president of capital markets at Mega Matrix, said financial institutions have already built significant digital asset infrastructure but remain cautious about launching stablecoin products.
“Their general counsels are telling their boards that you cannot justify the capital expenditure until you know whether stablecoins will be treated as deposits, securities, or a distinct payment instrument,”
Butler said.
Major banks including JPMorgan, BNY Mellon and Citigroup have already developed components of digital asset infrastructure such as blockchain payment networks, custody services and tokenised deposits.
However, Butler said regulatory ambiguity limits how far those investments can scale because compliance teams will not approve full deployment without clearer legal classifications.
Meanwhile crypto firms are likely to continue operating in regulatory grey zones as they have done historically, giving them a potential advantage in launching stablecoin-related products.
The growing yield gap between stablecoin platforms offering roughly 4–5% returns and traditional US savings accounts yielding less than 0.5% could also encourage deposit migration if stablecoins become widely used.
But Fabian Dori of Sygnum Bank said large-scale deposit flight remains unlikely in the near term as institutions still prioritise trust, regulation and operational resilience.