Digital dollars reach $322B; banks deploy $4T

The global stablecoin market has reached $322 billion while commercial banks have placed roughly $4 trillion of customer deposits onto tokenized ledgers. The two trends are changing how dollars move on blockchain rails and inside bank systems.

Tether’s USDT and Circle’s USDC together make up more than 80% of circulating stablecoin supply, with USDT accounting for about 59%. These dollar-pegged tokens are used for crypto trading, remittances, merchant settlements and cross-border corporate flows because they enable near-instant settlement and round-the-clock liquidity.

Banks are converting traditional deposit liabilities into tokenized deposits on permissioned blockchains so customers can access programmable settlement while keeping funds inside regulated institutions. Consultancy estimates project public stablecoin payment activity at about $400 billion in 2025, while institutional tokenized deposit networks are on track to process over $4 trillion annually. JPMorgan Chase’s internal ledger Kinexys is estimated to handle more than $1 trillion a year in treasury movements and intercompany settlements.

New federal legislation for payment stablecoins, framed in the GENIUS Act, requires issuers to segregate reserves, provide monthly independent attestations and accept direct oversight. The law requires tokens to be backed 1:1 by cash, short-dated U.S. Treasuries and Federal Reserve-eligible repurchase agreements and generally prevents regulated stablecoin issuers from lending or leveraging reserves. Commercial banks can continue fractional-reserve lending and use deposits to support credit and pay interest on tokenized balances.

Stablecoins mainly run on public chains such as Ethereum and Tron and benefit from broad interoperability and exchange liquidity. Bank-issued tokenized deposits typically operate on closed, permissioned ledgers with limited cross-network interaction. That split creates risks of isolated liquidity unless institutions adopt shared legal, operational and technical standards.

Groups including central bank forums, interbank messaging systems and private infrastructure projects are testing cross-ledger orchestration and connectivity to allow final settlement across different networks.

“Private money already underpins much of the U.S. financial system,” Coinbase’s chief policy officer Faryar Shirzad noted, pointing to commercial bank deposits and money market fund shares as large components of the money supply.

Market participants and regulators are focused on reserve transparency, legal clarity, cross-network interoperability and who controls the customer payment relationship as digital-dollar usage expands.