Banks fear losing market share and are considering stablecoins: BitGo executive [Consensus 2025] | CoinDesk JAPAN

• The reason banks are considering issuing stablecoins is not for innovation, but out of fear of falling behind their crypto-native rivals.
• Yield-bearing stablecoins serve as a quick, hassle-free, and excellent means of collateral transfer, especially for DAOs (Decentralized Autonomous Organizations) and institutional investors.
• Clarity of regulation will influence the future of tokenized assets, and stablecoins and tokenized U.S. Treasury bond funds will each form their respective markets.

Amid the tightening of regulations in the United States, competition surrounding stablecoins is intensifying, and banks are increasingly anxious about falling behind, according to Ben Reynolds, Managing Director of the stablecoin division at BitGo, who spoke at "Consensus 2025."

In a panel discussion, Mr. Reynolds stated that BitGo has received "incredible inquiries" from banks in the U.S. and overseas regarding their recently launched "Stablecoin as a Service." These banks are considering the tokenization of deposits and the issuance of stablecoins.

Many banks are taking a defensive stance. They fear losing deposits. They look at stablecoins and think, "What can we do to avoid being left behind?"

Recently, yield-bearing stablecoins and tokenized MMFs (money market funds) have been experiencing rapid growth. However, they still only account for a small part of the stablecoin market, which is approximately $230 billion (around ¥33 trillion, based on an exchange rate of ¥145 to $1).

Sam Broner of Andreessen Horowitz (a16z) pointed out that while yield-bearing stablecoins are a promising market segment, the main use of stablecoins is for payments and transactions, and users are not particularly interested in yield.

However, it was stated that a short-term killer use case is "collateral mobility". In other words, it is the ability to instantly move funds across multiple platforms for collateral.

"MMF has many limitations," said Bronner.

"There is a lock-up period, and settlements are limited to business hours, with contract verification done by a person. Cryptocurrencies possess programmability and permissionless flexibility."

Yield-bearing stablecoins are also attractive to institutional investors, said Matt Kunke, head of cryptocurrency product strategy at BlackRock.

"For DAOs (Decentralized Autonomous Organizations), protocols, and market makers, moving held cryptocurrencies between exchanges and brokerage accounts is time-consuming and cumbersome. Yield-bearing stablecoins can alleviate this hassle."

However, the regulatory classification will determine the shape of the market.

"Tokenized U.S. Treasury funds are securities, but stablecoins are not, and the two require fundamentally different markets," Kunke said.

Joseph Saldana, the Chief Financial Officer (CFO) of the Wyoming Stable Token Commission, stated that yield-generating tokens have the power to broaden investor access compared to mutual funds, which "excluded many people" due to minimum investment limits.

"We aim to deliver services to the underserved segments of the banking sector and expand access to financial products that other segments enjoy on a daily basis."