Stablecoins can pull funds from banks and local currencies far faster than legacy finance
Cointelegraph examines how stablecoins, with round-the-clock settlement and high liquidity, can move money out of banks and even out of national currency systems at a speed traditional finance cannot match. The article draws on comments from Anthony Vassallo, Arnold Lee and Pankaj Bengani, along with research from the European Central Bank, the Bank for International Settlements, Sphere Labs and Silicon Valley Bank. Together, those sources sketch two distinct patterns. In one, stablecoins accelerate dollarization in economies where people want access to dollars but face limits in the banking system. In the other, they function mainly as a faster settlement rail for cross-border business payments, with users converting back to fiat as soon as transfers clear. The piece also revisits the March 2023 USDC depeg after Circle disclosed that $3.3 billion of reserves were held at Silicon Valley Bank, and it reviews how MiCA reserve rules in Europe could amplify liquidity stress if redemption pressure rises quickly. The core point is not that banks vanish, but that stablecoins may shift where frictions and vulnerabilities sit inside the financial system.
