Rich by Coin

Banks stand at a digital crossroads as demand for faster, programmable money grows. Lenders are debating how to approach digital assets and whether to embrace stablecoins or convert their liabilities into tokenised deposits. Lenders face a choice: keep funds on balance sheet or embrace open networks. Stablecoins are easily integrated with decentralised finance and tokenised funds, enabling customers to earn returns without holding funds in a bank account.

But over time, this threatens to weaken banks’ control over liquidity and reduce the stickiness of deposits. Driving this decision are fears that deposits could migrate off bank balance sheets. Banks sit at a digital crossroads as demand for faster, programmable money accelerates. Lenders are reevaluating how to handle digital assets, debating whether to adopt stablecoins or convert liabilities into tokenised deposits.

The choice pits keeping funds on balance sheets against embracing open networks. Stablecoins integrate with decentralised finance and tokenised funds, allowing customers to earn yields without maintaining a bank account. Over time, this trend could weaken banks’ control over liquidity and reduce deposit stickiness as funds migrate off balance sheets. Fears of deposit migration drive these strategic decisions, underscoring the need for robust risk management, clear custody approaches, and consideration of regulatory implications as digital assets mature.