Jefferies Warns Stablecoins Could Drain Up to 5% of Bank Deposits by 2030

Digital Dollars Encroach on Banking Territory

Investment bank Jefferies has issued a stark warning about the growing competitive threat stablecoins pose to traditional banking. According to the firm's analysts, the stablecoin sector's market capitalization could reach $1.15 trillion within the next five years, triggering a gradual but significant migration of funds away from bank deposits.

The analysts emphasized that while digital dollars are unlikely to cause a sudden bank run, over a five-year horizon banks could lose between 3% and 5% of their core deposits. This erosion would inevitably raise funding costs and compress profit margins across the industry.

Why This Matters

Stablecoins have evolved far beyond their origins as crypto trading tools. Following the passage of the Genius Act in the United States, their use cases expanded dramatically to include everyday payments, treasury management, and cross-border transfers. In 2025, adjusted stablecoin transfer volume exceeded $11.6 trillion — a 49% increase year-over-year.

The fundamental challenge for banks is that stablecoins operate as digital cash around the clock and provide access to DeFi platforms offering yields that outpace traditional savings accounts. Bank of America CEO Brian Moynihan has previously warned that the U.S. banking system could lose up to $6 trillion in deposits. The Bank Policy Institute expressed similar concerns, citing U.S. Treasury Department research.

Regulation: The Key Restraint

Jefferies highlighted the market structure bill known as the Clarity Act as a potential counterbalance. In its current form, the legislation limits the appeal of stablecoins as savings instruments by designating them strictly as payment tools. According to Jefferies, the Clarity Act would close the "yield loophole" left open by the Genius Act. However, whether the bill passes in this exact form remains uncertain.

Banks Race to Adapt

Some major financial institutions are already responding. Fidelity Investments has launched its own stablecoin, FIDD. Bank of America and Goldman Sachs are exploring similar initiatives to issue their own digital dollar tokens.

Nevertheless, Jefferies identified banks with heavy exposure to retail and interest-bearing deposits as facing the greatest risk. The firm's analysts specifically flagged Wintrust, Flagstar, WBS, EagleBank, and Axos as the most vulnerable institutions. By contrast, large institutional players and custodians already investing in crypto infrastructure are significantly better positioned to weather the shift.

Jefferies' projection of stablecoin market cap reaching $800 billion to $1.15 trillion by 2030 underscores the systemic nature of this transformation. Pressure on traditional bank funding will intensify in proportion to the expanding role of digital dollars in the real economy.