The easiest story is that stablecoins will replace banks.
It is also probably too simple.
A 2026 Federal Reserve study describes stablecoins as potential competitors to transaction accounts, payment processing, settlement, and short-term transaction balances. But it also points to a long historical pattern: banks rarely respond to financial innovation by standing still.[1]
They adapt.
That changes the question.
Quick answer
The winner in on-chain finance may not be “crypto” or “banks.” The strongest positions are likely to belong to institutions that control trusted assets, customer distribution, custody and compliance, and reliable settlement across old and new financial rails.
This is the economic conclusion of the series.
Asset tokenization changes how a claim can be represented. Tokenized Treasuries show why familiar assets may move first. U.S. policy assigns different roles to Bitcoin, stablecoins, and tokenized securities. Wall Street moving on-chain shows which parts of financial infrastructure are becoming programmable.
Now we can ask the money question:
If the rail changes, who keeps the economics?
Do not start with companies. Start with control points.
There is a temptation to turn tokenization into a list of stocks, coins, and protocols.
That skips the harder question.
Before asking which company wins, ask where value can be captured.
There are five important control points.
On-chain finance is a value-chain contest. A firm does not need to control every layer, but the strongest positions often combine trusted assets, distribution, regulatory permission, and interoperable infrastructure.
1. Trusted assets
A new rail has little value if nobody wants the asset moving on it.
That is why U.S. Treasuries, bank deposits, regulated funds, and other familiar claims matter so much.
Tokenization can make an asset easier to move. It does not create trust from nothing.
2. Money
Every financial market needs a settlement asset.
That creates competition between stablecoins, tokenized bank deposits, and other regulated forms of digital money.
3. Distribution
The institution that owns the customer relationship has power.
Banks have accounts. Brokers have investors. Asset managers have funds. Stablecoin issuers and wallets can have global digital distribution.
4. Custody and compliance
Financial claims need more than a private key.
Large institutions need custody, identity, sanctions controls, legal records, redemption procedures, and operational resilience.
5. Settlement and interoperability
A token that cannot move between useful markets becomes another digital island.
The final control point is therefore the infrastructure that connects assets, money, custodians, blockchains, and clearing systems.
Stablecoin issuers: a new payment franchise
Stablecoin issuers have one obvious advantage.
They can put dollar-linked money directly onto digital networks.
The GENIUS Act requires permitted payment stablecoin issuers to hold at least one-to-one reserves in eligible liquid assets. Those assets can include short-term U.S. Treasury securities and certain other safe instruments.[2]
The same law says issuers may not pay holders interest or yield solely for holding, using, or retaining a payment stablecoin.[2]
This creates an important economic distinction.
A regulated payment stablecoin is not meant to behave like a high-yield savings account.
Its business value can instead come from the payment network, distribution, reserve management, partnerships, and services around the coin.
BIS research shows how large that reserve channel has already become. As of December 2025, stablecoins had more than $270 billion in combined assets under management, and issuers bought nearly $35 billion of U.S. Treasury bills during 2025.[3]
Potential advantage: global digital-dollar distribution plus a large reserve base.
Main risk: regulation, redemption pressure, reserve concentration, competition, and the possibility that payment rails become commoditized.
Banks: threatened in one layer, strong in several others
Banks face a real challenge.
If consumers and companies move transaction balances into stablecoins, banks can lose some of the cheap and stable funding provided by deposits.
The Federal Reserve notes that the effect depends heavily on what stablecoin issuers do with their reserves. If reserves stay as bank deposits, money can remain largely inside the banking system. If reserves move into Treasuries or other non-bank assets, deposit levels and especially deposit composition can change.[1]
But banks also control several valuable layers at once.
- They already hold customer deposits.
- They can issue tokenized deposits.
- They provide credit.
- They have regulated custody and compliance systems.
- They connect directly to central-bank money and established payment infrastructure.
The Federal Reserve’s March 2026 testimony argued that responsible innovation can improve payments, product offerings, cost, credit availability, and bank efficiency.[4]
This is why the “stablecoins kill banks” story is weak.
Banks may lose some old economics while building new ones.
The winners will likely be banks that can make deposits and custody work on new rails without losing the trust and regulatory advantages of the old system.
Asset managers: turn trusted portfolios into digital products
Asset managers have a different advantage.
They already know how to build regulated investment products around stocks, bonds, money-market instruments, and Treasury securities.
Tokenization gives them another distribution and settlement format.
Franklin Templeton’s BENJI offers a useful example. The Franklin OnChain U.S. Government Money Fund uses a public blockchain as its official system of record, and its shares are represented by BENJI tokens.[5]
This model does not require the asset manager to invent a new speculative token.
It takes a familiar regulated fund and gives the fund a digital ownership and transfer rail.
Potential advantage: trusted investment products plus new distribution channels.
Main risk: if tokenized funds become easy to replicate, fees and distribution may become more competitive.
Market infrastructure: the quiet winner?
The most interesting winner may be the least glamorous one.
Clearing houses, depositories, custodians, and post-trade infrastructure do not need to beat banks or blockchains.
They can become the bridge between them.
DTCC says DTC holds more than $114 trillion in assets. Its new tokenization service is designed to tokenize DTC-custodied assets while preserving the same entitlements, investor protections, and ownership rights as the traditional form.[6]
DTCC is also developing tokenized collateral infrastructure. Its May 2026 research argues that near-real-time collateral mobility could reduce liquidity buffers, lower capital requirements, and improve liquidity management.[7]
This points to a powerful position.
If markets become more digital but still need trusted records, standards, collateral, clearing, and final settlement, existing market infrastructure can become more important—not less.
Its value may come from being neutral, regulated, and connected to everyone.
Blockchain networks: more activity does not always mean more power
Blockchain networks can benefit when more money and assets move on-chain.
They may gain transaction activity, developer ecosystems, institutional integrations, and network effects.
But there is a problem.
Finance does not want hundreds of disconnected islands.
The BIS 2026 Annual Economic Report highlights fragmentation across blockchains and the lack of native interoperability between stablecoins issued on different networks.[8]
DTCC is responding with a multi-chain strategy. It plans to connect tokenized DTC assets to different networks rather than make the market depend on one blockchain.[9]
That changes the competitive logic.
A blockchain can be widely used and still fail to capture the full economic value if regulated institutions control the asset, customer, custody, and settlement layers.
Potential advantage: activity, standards, developer adoption, and connectivity.
Main risk: interoperability can make the underlying chain more replaceable.
Bitcoin: a different kind of winner
Bitcoin does not fit neatly into the same value chain.
It is not a claim on a bank. It is not a stablecoin reserve. It is not a tokenized Treasury. It does not need an asset manager to create the underlying asset.
That gives Bitcoin a different role.
Its potential value comes from scarcity, liquidity, network recognition, and its position as a non-sovereign digital asset.
That can make Bitcoin a beneficiary of broader digital-asset adoption.
But it does not mean Bitcoin automatically wins the payment or settlement layer.
A financial system can use tokenized bank deposits, stablecoins, tokenized Treasuries, and regulated settlement infrastructure while Bitcoin remains mainly a reserve-like or investment asset.
This is why Bitcoin vs. Gold: What Makes a Store of Value in the Digital Age? belongs to a different question from stablecoin and settlement economics.
The U.S. Treasury market may benefit without “winning”
There is one more beneficiary that is not a company.
The U.S. Treasury market sits underneath several parts of this system.
Stablecoin reserves can create demand for short-term Treasuries. Tokenized Treasury products bring government debt directly onto digital rails. Money-market funds can hold Treasuries while their shares become tokenized.
BIS research estimates that stablecoin issuers bought nearly $35 billion of T-bills in 2025.[3]
This does not prove that tokenization will solve U.S. government financing needs.
But it does show that the growth of digital-dollar infrastructure can create new channels connecting crypto markets to U.S. safe assets.
Who has the strongest position?
There is no single winner because each group controls a different part of the stack.
| Player | Main advantage | Main pressure | What to watch |
|---|---|---|---|
| Stablecoin issuers | Digital-dollar distribution and reserve base | Regulation, redemption, competition | Payments outside crypto trading |
| Banks | Deposits, credit, customer trust, regulation, custody | Deposit substitution and faster competitors | Tokenized deposits and custody adoption |
| Asset managers | Trusted products and investment distribution | Fee pressure and platform competition | Tokenized fund assets and investor use |
| Market infrastructure | Neutral records, clearing, standards, collateral | Technology transition and new competitors | Production settlement and collateral volumes |
| Blockchain networks | Programmability and global digital connectivity | Fragmentation and commoditization | Institutional interoperability |
| Bitcoin | Scarcity and independent digital-asset status | Volatility and a different role from payments | Reserve and investment adoption |
The table suggests a broader rule.
Tokenization does not automatically reward the newest technology provider.
It can reward whoever already controls something difficult to reproduce: trusted assets, customer relationships, regulation, liquidity, custody, or market-wide standards.
The four tests for a real winner
When evaluating a company, network, or asset in the on-chain finance theme, ask four questions.
- Does it control a scarce or trusted asset?
- Does it own distribution or the customer relationship?
- Does regulation protect its role—or threaten it?
- Does it become more valuable as different financial rails connect, or more replaceable?
The last question may be the most important.
A firm can grow transaction volume and still lose pricing power if its service becomes a commodity.
A boring infrastructure provider can gain power if every new system needs to connect through it.
What to watch next
The next stage should be measured with operating evidence, not slogans.
- Stablecoins: how much activity moves beyond crypto trading into payments, payroll, settlement, and commerce?
- Banks: do tokenized deposits become a real competitor to non-bank stablecoins?
- Asset managers: do tokenized funds gain assets because of better distribution and settlement, or only because the theme is new?
- DTCC and market infrastructure: do production tokenization and collateral systems reduce measurable cost or liquidity needs?
- Blockchains: which networks become interoperable institutional rails rather than isolated ecosystems?
- Bitcoin: does adoption deepen its reserve-like role without requiring it to become the dominant payment rail?
These signals tell us where the economics are actually moving.
Conclusion
The debate is often framed as crypto versus banks.
That is probably the wrong map.
On-chain finance is rearranging a value chain.
Some stablecoin issuers may gain payment distribution. Some banks may lose deposits but gain tokenized money and custody business. Asset managers can place trusted funds on new rails. Market infrastructure can connect the old and new systems. Blockchain networks can carry more financial activity. Bitcoin can remain a separate scarce digital asset.
None of them needs to win everything.
The strongest position may belong to whoever combines four things:
trusted assets + distribution + regulatory permission + settlement access.
That is why the final story is not that crypto replaces finance.
It is that the economics of finance move toward the institutions that control the most trusted parts of the new rails.
Key Vocabulary & Phrases
- value capture — the ability to keep part of the economic benefit created by a product or system.
High transaction volume does not always lead to strong value capture. - deposit franchise — a bank’s ability to attract and retain customer deposits as a source of funding.
Stablecoins may put pressure on parts of the traditional deposit franchise. - reserve economics — the income, cost, and risk created by assets held to back a financial claim.
Reserve economics matter to the stablecoin business model. - distribution — the channels and customer relationships used to deliver a financial product.
Asset managers can combine trusted products with new digital distribution. - interoperability — the ability of different systems or networks to work together.
Interoperability can increase adoption while reducing dependence on one blockchain. - commoditization — the process by which competing products become similar and harder to differentiate.
A blockchain can gain volume but lose pricing power if settlement becomes commoditized.
On-Chain Finance Series
- What Is Asset Tokenization? Why Putting Real Assets On-Chain Is Not the Same as Creating a Coin
- What Are Tokenized U.S. Treasuries? Why Government Bonds Are Moving On-Chain
- Why the U.S. Is Embracing Crypto: Bitcoin, Stablecoins, and Tokenized Finance
- Wall Street Is Moving On-Chain. What Does That Actually Mean?
Related Articles
- How Stablecoins Could Expand the U.S. Dollar’s Global Reach
- Stablecoin Yield Explained: Where the Yield Comes From—and What Can Go Wrong
- Can a Stablecoin Survive a Run? Reserves, Redemptions, and Depeg Risk
- Bitcoin vs. Gold: What Makes a Store of Value in the Digital Age?
References
-
Federal Reserve Board, Banks in the Age of Stablecoins: Lessons from Their Historical Responses to Financial Innovations, May 1, 2026.
Federal Reserve -
U.S. Congress, GENIUS Act, enrolled text, 2025.
Congress.gov -
Bank for International Settlements, Stablecoins and Safe Asset Prices, May 2025, revised June 2026.
BIS -
Federal Reserve Board, Randall D. Guynn, Innovation, testimony before the House Subcommittee on Digital Assets, Financial Technology, and Artificial Intelligence, March 26, 2026.
Federal Reserve -
Franklin Templeton, Franklin Templeton, Stellar Development Foundation Mark Five Years of BENJI, April 30, 2026.
Franklin Templeton -
DTCC, DTCC Advances Development of New Tokenization Service, May 4, 2026.
DTCC -
DTCC, Tokenized Collateral Could Unlock Billions in Capital and Transform Liquidity Management, May 13, 2026.
DTCC -
Bank for International Settlements, Anchoring Trust in Money: Innovation Beyond Stablecoins, Annual Economic Report 2026, June 23, 2026.
BIS -
DTCC, DTC’s Tokenization Service to Connect with Stellar Public Blockchain as DTC Advances its Multi-Chain Strategy, May 27, 2026.
DTCC