Six in ten community banks expect stablecoins to cost them deposits and lending, state supervisors find

Less than 1% of 330 respondents works out to three banks at most ^[4][14]. About 16% works out to roughly 53, assuming that share applies to the whole sample ^[5][15]. On those figures the share planning to offer stablecoin services is more than sixteen times the share offering them now ^[16]. The overwhelming majority still told the Conference of State Bank Supervisors they have no plans for the next 12 months ^[5]. The defensive reading fits most of the sample. It does not fit the 53 or so lenders preparing a product almost none of their peers sell.

The 60.2% worry ^[2] is about where the money lands once it leaves. Todd Phillips, a Klaros Group director and former Federal Deposit Insurance Corp. official, set out the route in August. "You're not going to have a giant stablecoin issuer like Circle putting reserves into community banks," Phillips told American Banker. "They're going to use JPMorganChase or a much larger company." ^[12]

Customers are not pushing yet. "There's not a clamoring out there from the customer base," Thomas Siems, the supervisors' chief economist, told American Banker ^[13]. That fits an offering share under 1% ^[4].

Most of the effort is going into rules. Banks have been trying to stop issuers and crypto exchanges from paying yield-like rewards on stablecoins, arguing those rewards would make the tokens largely mirror core deposits ^[8]. Their most recent legislative vehicle for that, a Republican-backed market structure bill, failed in the Senate ^[9]. American Banker read the survey as showing strong support among community bankers for uniform regulatory frameworks ^[17]. Jim Kisch, chief executive of the $934.5 million-asset Passumpsic Savings Bank in Vermont ^[11], made the case in comments released with the survey. "The primary objective for our industry must be ensuring a level playing field," Kisch said. "We must prevent nonbank competitors from exploiting regulatory arbitrage and ensure that rules are enforced uniformly across the board to safeguard our exceptionally strong banking system." ^[10]

For most respondents, then, the response to stablecoins is an argument about rules, and a token of their own is not on the 12-month plan ^[5]. Where banks do plan something, tokenized deposits rank slightly ahead of stablecoins, with crypto services further back ^[6][5].

If the planners follow through, next year's survey will show an offering share near 16% and the small-bank response will look competitive. A yield restriction written into law or rule would vindicate the majority's bet on regulation and give the planners less reason to proceed. And if customer demand stays where Siems puts it, the timing of the GENIUS Act, expected to be implemented in early 2027 ^[7], matters more than either. I think the defensive reading holds for the overwhelming majority. The counter-case is that the 16% figure is an intention recorded between April and July ^[3], set against an actual offering share under 1% ^[4]. The thesis fails if the next survey shows the offering share closing most of that gap.