The top banking regulator in the U.S. dismissed fears that stablecoins could trigger a sudden deposit crisis, urging community banks to view these digital assets as tools for competing with Wall Street giants rather than existential threats.

Jonathan Gould, head of the Office of the Comptroller of the Currency (OCC), addressed attendees at the American Bankers Association Annual Convention in Charlotte on Monday. He emphasized that any material deposit flight “would not happen in unnoticed fashion” and “would not happen overnight.” Gould reassured the audience, saying, “If there were to be a material flight from the banking system, I would be taking action,” and noted that “highly elected officials” and trade associations would also step in.

These remarks come amid months of industry pressure on Congress to close loopholes in the GENIUS Act, the nation’s first major stablecoin legislation signed into law in July. Industry projections signal the impact stablecoins could have on traditional banking deposits. For instance, Standard Chartered recently projected that stablecoins might siphon $1 trillion in deposits from emerging market banks within three years. Meanwhile, a Treasury Department report estimated stablecoins could trigger up to $6.6 trillion in U.S. deposit flight, depending on yield offerings.

The stablecoin sector continues to grow rapidly. Users of prediction market Myriad (launched by Decrypt’s parent company, Dastan) currently place a 55% chance on the market capitalization of all stablecoins crossing $360 billion before February 2026.

Federal banking agencies involved in GENIUS Act rulemakings remain “very conscious of the statutory deadlines that Congress has given us,” Gould added. He highlighted that payment stablecoin connectivity “might be a possibility” for community banks to “break some of the dominance that exists right now among the very largest banks in the payment system in America.” He emphasized his role in ensuring “there are ways for you to do this in a safe-and-sound manner.”

### Banking Groups Warn of “Loopholes”

The American Bankers Association, Bank Policy Institute, and over 50 state banking groups sent a letter to Congress in August demanding closure of “several loopholes” in the GENIUS Act. These groups urged lawmakers to extend the interest prohibition to “digital asset exchanges, brokers, dealers, and affiliated entities” and called for removing the approval pathway that allows non-financial firms to issue stablecoins.

“Banks’ concern with stablecoins isn’t just about regulation—it’s about survival in a changing financial landscape,” said Prarabdh Sharma, DeFi Partnerships at STBL, in an interview with Decrypt. “Even a 10% shift could raise their funding costs by 20-30 basis points, cutting into lending capacity and profitability.”

However, Sharma noted that this shift also opens new opportunities. Banks can “adopt the same underlying blockchain rails to tokenize deposits, streamline payments, and issue regulated, interest-bearing digital dollars of their own.”

In related industry developments, Bridge applied for an OCC national trust charter in October, following similar applications from Coinbase, Circle, Paxos, and Ripple.
https://decrypt.co/345150/occ-chief-plays-down-stablecoin-bank-run-fears