Two developments this week add an important layer to the stablecoin and deposit conversation — and they’re best understood together.
First, market infrastructure is moving toward always-on settlement.
The New York Stock Exchange announced plans to launch a 24/7 trading platform for blockchain-based securities, with near-instant settlement on digital rails. That’s a meaningful shift from periodic trading hours and T+1 settlement toward continuous markets, where funding, margin, and collateral need to move in real time.
This matters because faster settlement changes the operational demand for liquidity. When markets don’t “close,” liquidity can’t wait for batch cycles or next-day settlement. Cash-like instruments that move instantly — including stablecoins and tokenized deposits — become more useful as settlement assets, not because they replace deposits, but because they fit the timing of the market.
Second, the debate around yield-bearing stablecoins is intensifying.
Senior banking executives have warned that yield-bearing stablecoins could attract trillions of dollars from traditional deposits if incentives resemble interest. Whether or not those figures ever materialize, the concern highlights a key distinction: incentives change behavior faster than technology alone.
Stablecoins that merely move money create different dynamics than stablecoins that pay for holding money. Yield introduces direct competition with deposits, while non-yielding stablecoins primarily compete on speed, programmability, and convenience.
Seen together, these two developments clarify where the real inflection point lies:
- Speed (24/7 markets, instant settlement) increases the velocity of liquidity
- Incentives (yield or rewards) increase the attractiveness of holding liquidity
Either can affect deposit behavior — but incentives are far more likely to drive structural substitution.
That’s why regulatory debates are increasingly focused on what stablecoins are allowed to offer, not just how they are built. And it’s why tokenized bank deposits are often framed as a middle ground: preserving deposit economics and protections, while adopting the speed required by always-on markets.
The takeaway isn’t that deposits are about to disappear. It’s that liquidity is being pulled in two directions at once: toward faster rails and toward stronger incentives. How those forces are balanced will matter far more than headline market-cap comparisons.
Arnab Pandey 