Arnab Pandey

As we settle into February, the conversation around deposits, funding costs, and digital competition is sharpening in policy, markets, and industry strategy.

Stablecoin yield policy is front and center. A White House meeting set for Feb 10 brings banks, crypto firms, and regulators together to address whether stablecoin issuers should be allowed to offer interest-like rewards — a contentious issue because it cuts to the heart of deposit competition and funding stability.

Across the industry, banks continue to grapple with funding cost pressures amid macro uncertainty and evolving competitive dynamics. Recent outlooks highlight that banks must navigate rising deposit betas, tightening margins, and competition from alternative liquidity providers including neobanks and blockchain rails.

Globally, initiatives like Europe’s push for bank-backed stablecoins tied to the euro reflect an effort to innovate while managing deposit interchange and cross-border liquidity flows.

Meanwhile, macro outlooks suggest deposit bases remain generally stable as competition from higher-yield securities moderates and capital buffers remain solid. But behavioral competition — especially around yield and instant settlement rails — is increasingly part of funding and ALM discussions.

These themes point to a funding landscape where deposit stability interacts with competitive incentives and liquidity velocity rather than simple balance sheet totals — a dynamic that treasury and ALM teams will need to monitor closely.