Capstone believes regulatory frameworks established by the GENIUS Act, the CLARITY Act, and Securities and Exchange Commission (SEC) actions will usher traditional banks and securities trading platforms into digital-asset markets, creating competition for incumbent crypto platforms by lowering fees. At the same time, non-US countries will combat dollarization by promoting domestic stablecoins over their US dollar counterparts.
Outlook at a Glance
- Unified Trading Platforms or “Super-Apps” Emerge as Traditional Financial Firms Enter Digital Asset Markets, Shrinking Fees for Crypto-Native Exchanges Like Coinbase, Gemini
- A Major Bank Consortium Will Likely Develop Its Own Stablecoin, Edging Out Circle and Tether
Fear of Dollarization Will Drive Countries to Restrict USD-Denominated Stablecoins and Develop Their Own Fiat-Denominated Domestic Champions.
| Winners | Non-US Stablecoin Issuers |
| Losers | Circle Internet Group Inc. (CRCL), Coinbase Global Inc. (COIN) |
Capstone believes that countries will begin imposing restrictions on the flow of US-denominated stablecoins due to concerns that the proliferation of USD stablecoins will lead to an increase in dollar-based transactions within their jurisdictions after the US enacted the GENIUS Act in 2025. As a result, US stablecoin issuers and cross-border payment companies will benefit from domestic regulatory tailwinds while they face headwinds abroad as they navigate a patchwork of increasingly stablecoin-sensitive countries and regulations.
Much of the discussion in the US regarding stablecoins, which are digital assets whose value is intended to be pegged to a fiat currency, most commonly the US dollar, has been focused on the opportunities in cross-border payments, the demand for US dollars in emerging markets, and their potential to goose demand for a growing quantity of US Treasuries. However, these conversations ignore the threat that US dollar stablecoins present to other markets. Implementing fiscal and monetary policy through a fiat currency are two of the primary economic powers available to a sovereign state. The increase in the economic hegemony of the US through the use of its currency, known as dollarization, through the use of US dollar-linked stablecoins presents a real threat to those powers. According to a recent International Monetary Fund report, stablecoin holdings have risen to 1.5% and 2.7% of total deposits in Africa and the Middle East, and in Latin America and the Caribbean, respectively.
In our view, many countries will work to preserve their fiat currency by trying to limit the use of US dollar stablecoins in their economies and by introducing stablecoins tied to their own fiat currencies. While it is very difficult to restrict the flow of digital assets, we expect countries will begin regulating the venues through which their fiat currencies can be traded for stablecoins. In more extreme cases, some countries have shown they are willing to penalize stablecoin operators. One vivid example occurred in Nigeria in 2024, when the country detained two executives at digital currency company Binance, charging them with tax evasion and money laundering. The Nigerian government blamed Binance for a surge in inflation due to a decline in the country’s currency, the naira, which it attributed to trades on its platform where Nigerians sold the naira for the US dollar-pegged stablecoin Tether (USDT).
Anxiety tied to US dollar stablecoins is not limited to emerging markets, and we anticipate the European Union and Canada to push their own stablecoins to compete. European Central Bank (ECB) adviser Jürgen Schaaf sounded the alarm in July, arguing that stablecoins pegged to the US dollar could weaken the ECB’s control over monetary policy. And as Canada prepares for its own stablecoin legislation, Canada’s Finance Minister François-Philippe Champagne has argued that Canadian stablecoins are important to him and Prime Minister Mark Carney to as a Canadian alternative to US dollar stablecoins.
Unified Trading Platforms or “Super-Apps” Emerge as Traditional Financial Firms Enter Digital Asset Markets, Shrinking Fees for Crypto-Native Exchanges Like Coinbase, Gemini
| Winners | Charles Schwab Corp. (SCHW), Robinhood Markets Inc. (HOOD) |
| Losers | Coinbase Global Inc. (COIN), Gemini Space Station, Inc. (GEMI) |
Capstone anticipates that traditional trading and crypto-native platforms will start to converge into unified trading platforms, which SEC Chairman Paul Atkins has dubbed “super-apps.” In our view, the advent of these platforms will reduce the substantial fees reaped by crypto platforms like Coinbase and Gemini. At the same time, though, any delays to the SEC’s approval of tokenized securities trading could give traditional trading platforms a head start in bringing the platforms to market.
As Chairman Atkins has said, “Nothing in the federal securities laws prohibits SEC-registered trading venues from listing non-securities on their platforms today.” With the likely enactment of the CLARITY Act and the SEC’s Project Crypto in motion, traditional trading platforms are rushing to incorporate crypto into their services. Charles Schwab plans to roll out Bitcoin and Ethereum trading in the first half of 2026. Morgan Stanley (MS) has partnered with Zerohash to enable customers of its E*Trade unit to trade Bitcoin, Ethereum, and Solan on a similar timeline. Schwab will likely compete with crypto incumbents by offering low, if not zero, fees for crypto trading, akin to its free stock and exchange-traded funds (ETF) trading. Additionally, Schwab has 38 million active brokerage accounts as of Q3 2025, versus Coinbase’s 9.3 million monthly transacting users.
Meanwhile, crypto firms such as Coinbase Global, Inc. (COIN) are seeking to enter traditional securities markets through tokenization. While traditional trading platforms are not subject to regulatory restrictions on crypto trading, crypto platforms must wait for SEC approval to begin offering tokenized securities. Although Chairman Atkins has indicated that tokenized securities are a clear priority within Project Crypto, they face significant hurdles to long-term approval. Atkins intends to use “innovation exemptions” in early 2026 to enable near-term progress, but the SEC will need to work through a bevy of rulemakings in the medium term to ensure their permanence. Any hurdles or delays will add to the early-mover advantage that companies such as Schwab have in the race for a competitive super-app.
A Major Bank Consortium Will Likely Develop Its Own Stablecoin, Edging Out Circle and Tether
| Winners | JPMorgan Chase & Co. (JPM), Bank of America Corp. (BAC), Citigroup Inc. (C), Wells Fargo & Company (WFC) |
| Losers | Circle Internet Group Inc. (CRCL), Coinbase Global Inc. (COIN) |
We expect the major US banks to issue their own stablecoin for inter- and intrabank transactions rather than adopt a preexisting stablecoin, such as Circle Internet Group Inc. (CRCL)’s USDC. In turn, Circle will face headwinds as it competes with the network effects that major banks benefit from.
With the passage of the GENIUS Act, US dollar-linked stablecoins will necessarily be homogeneous, all relying on the same narrow band of backing assets. As a result, the adoption of specific stablecoins will be driven primarily by on- and off-ramps, shifting the benefit of backing-asset yield revenue to customer and business-facing platforms. Although Circle and other stablecoin issuers have created generous revenue-sharing agreements with platforms to drive adoption, the banking industry would be well-served by following the lead of other stablecoin consortia, like the Global Dollar Network, and create its own stablecoin, ensuring it fully captures the yield revenue.
We think that if large banks decide to issue a stablecoin, they will do so as a consortium akin to their money-transfer network, Zelle. The big banks were reportedly discussing a joint cryptocurrency venture as early as May, which would include Early Warning Services, the operator of Zelle, and the Clearing House, the real-time payment network, both of which are co-owned by major banks.
