Stablecoin Regulatory Ambiguity Deepens Competitive Gap with Traditional Banks

Regulatory uncertainty over stablecoin classification could further disadvantage traditional banks compared with crypto firms, Cointelegraph reports. Colin Butler, Executive Vice President of Capital Markets at Mega Matrix, said bank legal advisers have urged boards to postpone major spending on stablecoin infrastructure because it remains unclear whether these assets will be treated as deposits, securities, or independent payment instruments, and risk and compliance teams will not authorize full rollouts until classifications are settled. Banks that have already committed resources face deployment limits, while crypto exchanges offer 4%–5% yields on stablecoin balances, which may accelerate fund shifts among more adventurous users. Fabian Dori, Chief Investment Officer at Sygnum, said this uneven competition is meaningful but has not yet caused large-scale deposit withdrawals as banks still stress trust, regulation, and resilience, adding that pressure could intensify if stablecoins are designated as "productive digital cash" and that yield caps might drive stablecoin activity offshore; banks are less able than crypto companies to operate in regulatory gray areas, which compounds their disadvantage.