Stablecoin uncertainty could disadvantage banks more than crypto firms

Colin Butler, executive vice president of capital markets at Mega Matrix, warned that regulatory uncertainty around stablecoins may leave traditional banks at a greater disadvantage than crypto companies. He noted that many financial institutions have already spent heavily on digital asset infrastructure but cannot fully deploy it while lawmakers debate whether stablecoins are deposits, securities, or a distinct payment instrument.

Butler pointed to concrete examples of banks building that infrastructure: JPMorgan’s Onyx blockchain payments network, BNY Mellon’s digital asset custody services, and Citigroup’s tests of tokenized deposits. He argued that the infrastructure spend is real but that ambiguity limits how far those investments can scale because risk and compliance teams will not greenlight full deployment without clarity on classification.

The widening yield gap could also accelerate a shift of deposits.

stablecoins, regulatory uncertainty, banks, crypto firms, digital assets, tokenized deposits, jpmorgan onyx, bny mellon, citigroup, yield gap