Jefferies Sees Stablecoins Siphoning 3%–5% of Bank Deposits, Pressuring Earnings Over Five Years

Overview

• Jefferies projects a gradual 3%–5% runoff of core deposits as stablecoin use expands into payments and activity-based yield, trimming average bank earnings by about 3% through higher funding costs.
• Stablecoin supply reached roughly $305 billion at end‑2025 with total market cap near $314 billion, and adjusted transfer volume hit $11.6 trillion last year; Jefferies sees $800 billion to $1.15 trillion within five years.
• The GENIUS Act, enacted in July 2025, prohibits regulated issuers from paying yield to passive holders, which Jefferies says tempers the risk of a sudden shift from checking and savings accounts.
• Banks with heavier retail and interest‑bearing deposits are seen as most vulnerable, with Wintrust Financial, Flagstar Financial, Webster Financial, Eagle Bancorp and Axos Financial cited by the report.
• Incumbents are moving to compete as Fidelity launches the Fidelity Digital Dollar, Bank of America signals willingness to issue a coin if legalized, and Goldman Sachs intensifies work on tokenization and stablecoins.