Stablecoins are no longer a peripheral concern for traditional finance; they are now central to the industry's future strategy. This shift, which has occurred in just the past six months, is largely due to the establishment of clearer regulations, and banks need to be paying attention.
Understanding recent regulations
The GENIUS Act became law July 18, 2025. By December, the OCC had conditionally approved national trust bank charters for Circle, Ripple, BitGo, Fidelity Digital Assets and Paxos—five of the biggest names in digital asset infrastructure now operating inside the federal banking perimeter. In February of 2026, the OCC followed with a detailed 376-page proposed rule set which will ultimately implement the Act.
The Act creates three roles for banks: issuance, custody and distribution. While not every institution will issue its own stablecoin, every institution involved in payments must currently address the question of distribution. Stablecoins are projected to represent 3% of all U.S. dollar payments this year and 10% by 2031. Early movers who establish distribution relationships now will secure the growing customer volume. Institutions that delay will struggle to win back customers who have already transitioned elsewhere.
The FDIC issued its proposed rule last week, with comments due by May 1 and final regulations planned for July. With the law taking effect no later than January 2027, banks that delay addressing this issue are already losing valuable time.
The volume is real
Stablecoins processed $33 trillion in on-chain transactions in 2025, a 72% jump from the prior year according to Artemis Analytics. Visa processed $15.7 trillion in fiscal year volume over the same period. The $33 trillion figure includes trading and DeFi flows, not just payments, so it's not a direct comparison—but the scale is real and the growth rate is not slowing down. Tether alone now holds more U.S. Treasuries than most countries, over $135 billion, ranking it 17th globally among all holders. That puts a stablecoin issuer on the same list as sovereign nations, which tells you something about where this market has gone.
Large banks are already moving
JPMorgan, Bank of America, Citi and Wells Fargo began exploring a joint stablecoin last year, routing it through Early Warning Services and The Clearing House. Bank of America's CEO put it plainly: “We have to have it. The industry has to have it.” SoFi Bank moved further than exploration—they launched SoFiUSD, a fully reserved dollar-pegged stablecoin built on BitGo's stablecoin-as-a-service infrastructure. Both are OCC-regulated institutions, and SoFi didn't need to build proprietary technology to get there. For the majority of banks in the country, lacking JPMorgan's engineering budget, building a stablecoin infrastructure internally is not feasible. The practical solution for these institutions lies in leveraging infrastructure partners.
Next steps for banks
The hypothetical regulatory window for stablecoins, which I discussed in "From niche to necessity: why banks can’t afford to ignore stablecoins" in October 2025, has become a reality with the publication of proposed rules and the public comment deadlines. The initial question ‘are stablecoins real?’ has been definitively answered. Thus, the current challenge for banks is determining their strategic role, all while new legislation is being enacted.
Given the rapid regulatory shifts, the immediate and most practical step for your institution is to continuously educate staff and leadership on the latest regulations and their implications. For banks ready to move beyond education, another strategic direction is to begin exploring partnerships that enable the offering of stablecoins to your account holders. This kind of approach to stablecoins can allow institutions to engage with stablecoins and satisfy customer demand while mitigating the initial burdens associated with infrastructure development and compliance.
By making education a priority and strategically pursuing stablecoin partnerships, your financial institution can adeptly navigate the evolving regulatory environment, address changing customer needs, and secure a strong position in the future financial landscape.
Sean Ristau is Vice President of Digital Assets at InvestiFi, a B2B digital asset and securities platform serving banks and credit unions.
