Blockchain Association has rejected claims from large banks that stablecoins are causing deposit outflows from community banks, saying the argument is not supported by evidence. In a post on X, the group said the clearer pattern in the data is that large banks have been taking deposit share from community banks for decades.
FDIC figures show deposits concentrated at non-community banks
According to Blockchain Association, Federal Deposit Insurance Corporation data through 2023 show that non-community banks, described by the group as large banks, held at least 87% of U.S. domestic deposits. Community banks accounted for the remaining 13%.
The association also said that JPMorgan Chase and Bank of America together held a combined deposit share more than 1.5 times larger than that of the entire community banking sector.
Bank deposits kept rising after the GENIUS Act was signed
Blockchain Association said U.S. bank deposits did not contract after the GENIUS Act was signed on July 18, 2025. Instead, deposit growth accelerated quarter by quarter, which it said runs counter to the claim that stablecoins are eroding the deposit base.
- Q3 2025: deposits increased by $92.2 billion
- Q4 2025: deposits increased by $318.3 billion
- Q1 2026: deposits increased by $389.7 billion
Group points to existing rewards programs tied to stablecoins
The association said current law already allows stablecoin reward mechanisms. It added that U.S. exchanges have paid rewards on USDC for more than four years, while community bank deposits have not collapsed.
CRA International analysis found no statistically significant link
Blockchain Association also cited CRA International’s analysis of seven years of data from 2019 to 2025. That analysis, it said, found no statistically significant relationship between stablecoin growth and outflows from community bank deposits.
Even under a worst-case assumption, the effect was below 7%, according to the group. Under real-world conditions, it said the effect was less than 1%. It also said stablecoin market capitalization and community bank deposits generally moved in the same direction overall.
Association says Congress should look at long-running flows to large banks
Blockchain Association argued that money market funds, U.S. Treasuries, and large certificates of deposit have offered yields above checking accounts for years without causing deposit flight. If Congress is genuinely concerned about where community bank deposits are going, the group said, attention should be paid to the long-term trend of funds moving into large-bank cash management platforms and money market sweep products, rather than the stablecoin market, which it described as being about $300 billion in size.