Banks have spent the better part of two years warning that stablecoins would siphon money out of the traditional financial system. Coinbase’s chief policy officer has a different take: the numbers don’t support that story.
Faryar Shirzad pointed to a six-month window in which USDC supply grew by approximately 4.6-5% while total demand deposits in the US banking system climbed by roughly 4.5-5%. Both went up. Neither ate the other’s lunch.
The data behind the argument
USDC’s circulating supply has reached approximately $75 billion, making it the second-largest stablecoin by market cap.
A July 2025 study from Charles River Associates, commissioned by Coinbase, examined whether USDC adoption had measurably harmed community bank deposits. The conclusion: no statistically significant negative effects. Community banks, the institutions most often cited as vulnerable to stablecoin competition, appear to be doing just fine.
