Tokenized Equities on Solana Reach 1.5M Holders as Adoption Climbs

Tokenized Equities on Solana Reach 1.5M Holders as Adoption Climbs

by | Oct 26, 2026 | Solana

Tokenized equities on Solana have reached 1.5 million holders as of October 26, 2026, according to reports from Coinfomania and Crypto Briefing. The figure marks a roughly fivefold increase in the number of wallet addresses holding these blockchain-based representations of traditional stocks, according to figures attributed to the network.

The milestone ranks among the biggest increases in tokenized stock adoption reported on any blockchain so far, KuCoin reported, and it points to rising interest in blockchain-based financial products. Yet the record holder count has not lifted Solana's native token, and prediction markets price only a slim chance of a near-term rally.

Tokenized equities on Solana draw a wider base

Tokenized stocks are digital tokens issued on a blockchain that stand for shares in actual companies, giving holders price exposure without a traditional brokerage account, according to KuCoin. Solana has positioned itself as a hub for the category, citing fast transaction speeds and low fees as advantages over rival networks.

The growth in tokenized equities on Solana highlights the network's expanding influence in the crypto space, Coinfomania reported, and reflects broader acceptance of tokenization across the market. The increase coincides with a wider trend toward asset tokenization across various platforms, the outlet noted.

The surge in holders has been attributed to several factors, including reward distributions and programs tied to memecoins, according to Crypto Briefing. Market activity suggests the growing holder count is consistent with increased blockchain adoption, the outlet reported.

Regardless of how the data is measured, the reported growth signals continued interest in bringing real-world assets on-chain, KuCoin reported. The trend could strengthen Solana's standing in real-world asset tokenization, a segment widely seen across the industry as a driver of blockchain adoption over the long term.

Questions over how the 1.5M figure is counted

Part of the debate around the milestone stems from how the 1.5 million figure is measured, KuCoin reported. The network's own reporting ties the count to wallets holding tokenized equities on Solana.

According to KuCoin, Cryptonomist has pointed out that crypto.news tallies on-chain addresses instead of distinct individual investors. Since one person may operate several wallets at once, counting addresses can exaggerate how many distinct individuals actually hold these assets.

When a headline figure rests on address counts, it can make growth look larger than a tally of verified unique holders would show, KuCoin reported. Absent a confirmed methodology, how many individuals actually participate in Solana's tokenized equity market is still unclear.

SOL price unmoved by record holder count

The record surge in tokenized equity holders has not translated into gains for the network's native token, KuCoin reported. SOL has declined over the same period that the holder count grew, a gap between adoption and price that market observers have flagged.

Prediction markets show limited expectations for substantial Solana price increases by the end of October, Crypto Briefing reported. Traders currently assign just a 0.2% YES outcome to Solana hitting $190, the outlet said, underscoring how little confidence there is in a sharp move higher.

Crypto Briefing reported that market odds have shifted only slightly, which suggests the milestone, while worth noting, is unlikely to move Solana's price much in the immediate term. The disparity indicates that while adoption is increasing, broader factors may still weigh on Solana's short-term price potential.

SOL has traded around $101 to $102 after losing nearly 13% over the past 30 days, CryptoNews reported, while weekly DEX volume has decreased approximately 9%. DeFi total value locked sits at $5.77 billion, figures the outlet said point to a gap between available capital and actual economic activity on the network.

Stablecoin growth adds liquidity, not yet demand

Solana's stablecoin usage has broadened alongside tokenized equities, with holder address accounts rising from less than 4 million in October 2024 to 14 million in October 2026, CryptoNews reported. New holder growth picked up speed during 2025 and built further steam the following year, lifting the total beyond 10 million.

Total stablecoin supply on Solana remains above $15 billion, providing liquidity across the ecosystem, according to CryptoNews. Even with supply near $15.65 billion, the outlet reported that wider market dynamics point to little fresh capital flowing into trading venues.

Exchange flow data underscores the pattern. Beginning in June 2025, there have been multiple large surges in both deposits and withdrawals of stablecoins, with peak inflows of approximately $2.8 billion, CryptoNews reported, but subsequent withdrawals have consistently reversed any potential gains, including roughly $2.3 billion withdrawn in April.

In the latest readings, netflows have drifted close to neutral, coming in at negative $8.2 million, according to CryptoNews. Without sustained inflows, immediate buying pressure may remain limited, the outlet reported.

What could shift the outlook for tokenized equities on Solana

Crypto Briefing framed the trend as potentially favorable for Solana over the longer run, even though current market pricing barely reflects any near-term price effect. Observers will be watching whether rising interest in tokenized equities translates into stronger price performance for SOL, the outlet noted.

Key factors to monitor include potential regulatory developments, especially regarding spot SOL ETFs, which could influence market sentiment, according to Crypto Briefing. Any announcements from major partners such as Fiserv or Samsung on Solana integration could also serve as catalysts for future price movements consistent with a YES outcome, the outlet reported.

If verified with clearer unique-holder data, the trend may attract further issuers and platforms to build tokenized stock products on Solana, KuCoin reported. Investors tracking the ecosystem will likely watch for clarification on measurement methodology, as well as broader market conditions, before drawing conclusions about the long-term impact of tokenized equity growth on SOL's price.

Traders should watch Solana's continued growth in the tokenized equity segment, especially as interest in decentralized finance expands, Coinfomania reported. The increase in holders could lead to greater liquidity and more robust trading volumes, positioning the network to capitalize on emerging market dynamics, the outlet said.

Conclusion

Tokenized equities on Solana have reached 1.5 million holders as of October 26, 2026, a roughly fivefold increase that ranks among the largest reported jumps in tokenized stock adoption on any blockchain. The growth has not moved SOL's price, and prediction markets put the odds of Solana reaching $190 at just 0.2%.

The next concrete steps are clarification of how the holder figure is measured, since address counts can overstate unique investors, and any regulatory movement on spot SOL ETFs or partner announcements from firms such as Fiserv or Samsung that could shift market sentiment.

Frequently Asked Questions

How many holders do tokenized equities on Solana have as of October 26, 2026?

Tokenized equities on Solana reached 1.5 million holders as of October 26, 2026, according to reports from Coinfomania and Crypto Briefing. Figures attributed to the network indicate the count climbed roughly fivefold, and KuCoin reported it ranks among the largest jumps in tokenized stock adoption on any blockchain to date.

Why has SOL's price not risen with the 1.5 million tokenized equity holders?

The record holder count has not translated into gains for SOL, KuCoin reported, and the token has traded around $101 to $102 after losing nearly 13% over 30 days, according to CryptoNews. Crypto Briefing reported that broader factors may still weigh on Solana's short-term price potential despite rising adoption.

What are the prediction market odds of Solana reaching $190 by end of October?

Prediction markets show limited expectations for substantial Solana price increases by the end of October, Crypto Briefing reported. The probability of Solana reaching $190 remains low, with current market pricing at a 0.2% YES outcome, according to the outlet.

Could the 1.5 million holder figure overstate actual tokenized equity investors on Solana?

Yes. Cryptonomist has noted that crypto.news counts blockchain addresses rather than unique individual investors, according to KuCoin. Because one investor can control multiple wallets, address counts can overstate distinct holders, and until a clearer methodology is confirmed, the true scale of individual participation remains uncertain.

How large is Solana's stablecoin supply and holder base in October 2026?

Solana's stablecoin holder addresses rose from less than 4 million in October 2024 to 14 million in October 2026, CryptoNews reported. Total stablecoin supply on the network remains above $15 billion, sitting near $15.65 billion, which provides liquidity across the ecosystem.

Sources

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Circle CEO Digital Dollars Pitch Shrugs Off Bitcoin Slump for AI Era

Circle CEO Digital Dollars Pitch Shrugs Off Bitcoin Slump for AI Era

by | Oct 22, 2026 | Innovation Circle

Circle CEO digital dollars are the focus for Jeremy Allaire, who brushed aside questions about Bitcoin's underperformance this year, telling CNBC his attention is on dollar-pegged tokens designed for an economy where autonomous software handles transactions. In an interview reported by Yahoo Finance, Allaire framed his company's mission around financial plumbing rather than the trading swings of digital commodities.

The comments arrive as the Office of the Comptroller of the Currency puts finishing touches on regulations tied to the GENIUS Act, legislation passed in 2025 that governs tokens pegged to the dollar. Allaire said the regulatory work validates his sector's place in the financial system, even as other corners of crypto continue to face questions.

Allaire Dismisses Bitcoin Price Focus

CNBC's Seema Mody pressed Allaire on why Bitcoin has lagged this year if crypto represents the future of finance. Allaire rejected the premise that price action should drive the conversation about the technology's utility, making clear he views speculative trading as separate from the infrastructure Circle is building.

"I don't pay much attention specifically to like these sort of specific digital commodities, how they're trading, etc.," Allaire said, according to the interview. He positioned dollar-pegged tokens as instruments for moving money, extending credit and allocating capital, not as assets for betting on price appreciation.

Because these tokens are engineered to maintain a one-to-one peg with the dollar, their value does not rise and fall with Bitcoin's volatility. Allaire highlighted increasing usage of networks like Arc, a blockchain Circle debuted in September, as evidence of momentum behind his vision for programmable money that operates independently of crypto market cycles.

AI Agents and Machine-Built Blockchains

Allaire's broader argument rests on the rise of AI agents, software capable of completing tasks without human direction that he expects will handle a growing share of economic transactions. He contends this transition will generate need for dollar-denominated tokens and blockchains designed for machine use, the systems Circle develops.

He provided no data to quantify that anticipated demand during the interview. The pitch positions Circle's products as the underlying rails for an automated economy rather than instruments for traders chasing returns in volatile markets.

The distinction matters for Circle's business model. While Bitcoin's price swings dominate headlines and drive trading volume on exchanges, Allaire is betting that the real growth lies in software programs that need to settle payments, move funds between accounts and execute financial contracts without human intervention.

GENIUS Act Rules Take Shape

Allaire said the OCC's proposed regulations have direct implications for Circle, which issues USD Coin (USDC). According to Orrick, the draft rules would mandate that issuers hold reserves matching or exceeding the value of tokens in circulation and honor redemptions at face value within two business days.

The proposal would also prohibit issuers from offering interest to token holders. Allaire said the legislation is insulated from midterm political shifts because it attracted support from both parties, though the vote counts reveal a more divided picture than his characterization suggests.

Eighteen Senate Democrats voted for the GENIUS Act in 2025. In the House, Democrats were divided 102 to 110 when the bill came up for final passage, a narrow margin that underscores the fragility of the coalition Allaire described as bipartisan protection against future political headwinds.

Congress's broader effort to establish market structure rules for crypto, known as the CLARITY Act, stalled in the Senate and never became law. The contrast between the two bills highlights how stablecoins have achieved regulatory clarity while the wider crypto industry continues to operate without a comprehensive federal framework.

Banks Enter the Stablecoin Race

Competition is intensifying just as the regulatory picture comes into focus. Traditional banks have moved quickly to enter the stablecoin market, and 21 institutions have committed to launching a joint issuer, according to the report.

The sector now faces a dual reality: federal oversight is arriving at the same moment as a wave of new rivals from mainstream finance. Allaire's wager is that dollar tokens built for AI-powered transactions will prove more durable than the speculative cycles that drive coverage of Bitcoin and other digital assets.

The entry of established banks into the market could test Circle's first-mover advantage. While the company has operated USDC for years and built relationships across crypto and fintech, the joint issuer backed by 21 institutions represents a coordinated challenge from the traditional financial sector that Allaire has argued will eventually adopt blockchain-based money.

Conclusion

Allaire's message to CNBC was consistent: Circle is not in the business of tracking Bitcoin's price. The company is building dollar-pegged tokens for payments, lending and a future where AI agents execute transactions on blockchains designed for machines. The OCC's final rules for the GENIUS Act will shape how that business operates, setting reserve and redemption standards while barring interest payments to holders. Whether the bipartisan coalition that passed the law holds through the midterms, and whether banks launching rival tokens erode Circle's position, are the next concrete tests for Allaire's vision.

Frequently Asked Questions

What did Circle CEO Jeremy Allaire say about Bitcoin's slump?

Allaire told CNBC he does not pay much attention to how specific digital commodities trade. He said his focus is on dollar-pegged tokens for payments, lending and a future where AI software moves money, according to Yahoo Finance.

What are the OCC's proposed rules for the GENIUS Act?

The OCC proposal would require stablecoin issuers to hold reserves at least equal to outstanding tokens and to redeem them at par within two business days, according to Orrick. The rules would also bar issuers from paying holders interest.

How did Democrats vote on the GENIUS Act in 2025?

Eighteen Senate Democrats backed the GENIUS Act in 2025. House Democrats split 102 to 110 on final passage, according to Yahoo Finance.

What is Circle's Arc blockchain?

Arc is a blockchain Circle launched in September. Allaire pointed to growing activity on Arc and similar networks as part of his pitch for dollar tokens and machine-built infrastructure designed for AI-driven economic activity.

Are banks competing with Circle in stablecoins?

Yes. Banks have moved into stablecoins, and 21 institutions have committed to a joint issuer, according to Yahoo Finance. The competition arrives as federal rules for the sector take shape under the GENIUS Act.

Sources

Circle Expands Into 40 Emerging Markets as Stablecoin Demand Grows

Circle Expands Into 40 Emerging Markets as Stablecoin Demand Grows

by | Oct 19, 2026 | Adoption

Circle is preparing to expand into about 40 emerging and developing countries, chief executive Jeremy Allaire told Reuters, as the company positions itself for a broader phase of stablecoin adoption.

The move matters because Circle ranks as the largest regulated stablecoin issuer globally, with roughly a quarter of the market, giving its international push direct implications for the reach of USDC and for Circle's stock story.

Allaire made the comments during the IMF and World Bank meetings in Bangkok, where he described blockchain as moving out of the early adopter phase and into mainstream scaling.

Why Circle Is Targeting Emerging Markets

Allaire linked the expansion to rising demand across Southeast Asia, Latin America, Africa and the Middle East, where businesses and individuals are seeking ways to take part in an internet-based economy.

He also said stablecoin adoption is happening mostly outside the United States, underscoring why the company is looking abroad for its next stage of growth.

The company's strategy reflects a wider pattern in stablecoin use, with demand increasingly coming from payments and financial infrastructure needs rather than only from crypto-native users.

In that context, Circle appears to be treating stablecoins less as a niche settlement tool and more as an entry point into mainstream transactions, particularly in places where local banking and payment systems may be less flexible.

A broader presence across multiple markets could make it easier for regional partners to build compliant stablecoin services, though it depends on regulatory and banking integration remaining workable in each jurisdiction.

Payments Push and the Tazapay Deal

Circle's geographic ambition is being paired with a targeted expansion in payments infrastructure.

As part of that effort, Circle struck a deal to buy Tazapay, a Singapore-based cross-border payments platform, in an all-stock transaction valued at $400 million that is expected to close in 2027, Cointelegraph reported.

If completed, the acquisition would fit Circle's effort to scale beyond early adopters and deepen its presence in cross-border payments.

Cross-border payments are a natural proving ground for stablecoins because they demand speed, transparency and predictable settlement, characteristics dollar stablecoins are designed to provide.

Still, integration and regulatory alignment are likely to determine whether the acquisition accelerates usage in the targeted regions, and a deal's headline value does not automatically translate into faster adoption unless the acquired platform can expand its partner base, satisfy compliance requirements and cut costs enough to make customers choose stablecoin settlement over traditional alternatives.

The practical question for investors and operators is whether this broader footprint will produce sustained usage rather than one-off pilots.

USDC Usage and Market Position

Circle earns income from the reserves behind USDC, so growth in circulation and usage remains central to the business.

USDC circulation reached $73.3 billion in the second quarter, up 19% from a year earlier.

By market capitalization, USDC still trails Tether's USDt as the second-biggest dollar-backed stablecoin, but Bernstein said it has made substantial gains in transaction activity.

Bernstein's analysis, cited by Cointelegraph, found that USDC's share of adjusted stablecoin transaction volume climbed from roughly 40% in 2025 to above 60% so far in 2026, moving ahead of USDt on that measure.

That matters because transaction volume is often used as a proxy for how actively stablecoins are moving across exchanges, payment rails and settlement flows, while market capitalization can reflect price and liquidity.

Sustained gains in transaction share can indicate real adoption by payment service providers and market participants, though readers should watch how adjusted volume is defined and whether the shift reflects broader usage or a change in where activity is routed.

Arc, AI Payments and Revenue Beyond Reserves

Circle's Arc system has been adopted by firms including BlackRock, Visa and Standard Chartered.

On an earnings AMA, Allaire said Arc's public Mainnet launches on September 16 and said AI agents are driving use.

Those AI agents are being used to carry out very small payments, frequently amounting to fractions of a cent, in exchange for web research and data.

Bernstein analysts also highlighted early signs of stablecoin usage tied to payments executed by AI agents, and if automated systems increasingly need programmable, low-volatility settlement assets, dollar stablecoins like USDC could become a default bridge currency for certain workflows, though the durability and scale of that activity beyond early experiments remains uncertain.

Allaire has also said Circle is building other revenue lines beyond reserve income, including its payments network and Arc.

Regulation, Competition and What Comes Next

In July, Circle secured a federal bank charter, placing it among the first stablecoin issuers to do so.

The U.S. Genius Act is set to take effect in January, and Allaire described it as a watershed moment on the grounds that the world will have legal digital dollars.

At the same time, banks in the United States and Europe are developing their own stablecoins, adding competitive pressure as Circle expands abroad.

Allaire said he views that trend as a sign of a healthy market, even as Tether continues to hold a much larger share of the market.

That gap matters for Circle stock as it expands, especially with the shares down 23% over the last six months.

Bernstein analysts have turned bullish on Circle and anticipate a new growth cycle for USDC over the next 12 months, pointing to renewed momentum in broader crypto markets, improving U.S. regulatory clarity, the growth of tokenized capital markets and a wider role for stablecoins in payments.

Circle's next steps will likely depend on whether its market expansion and payments strategy translate into sustained USDC usage, and for the rest of 2026 and into 2027 investors should monitor regulatory developments affecting stablecoins alongside concrete evidence that transaction share growth holds up across regions and partners.

Conclusion

Circle is set on a much wider international buildout, with roughly 40 developing markets in its sights and a payments acquisition that could support that push. The company enters that next phase with a large regulated position in stablecoins, rising USDC circulation and new infrastructure such as Arc, but it still trails Tether in overall market share. The next concrete milestones are the Genius Act taking effect in January and the expected closing of the Tazapay deal in 2027.

Frequently Asked Questions

How many emerging markets is Circle planning to enter?

Circle is preparing to expand into about 40 emerging and developing countries, according to CEO Jeremy Allaire. He told Reuters the company is positioning for broader stablecoin adoption as demand grows outside the United States.

Why is Circle expanding into Southeast Asia, Latin America, Africa and the Middle East?

Allaire said demand is rising in those regions as individuals and businesses look for ways to participate in an internet-based economy. The expansion also reflects growing stablecoin use in payments and financial infrastructure, not just among crypto-native users.

What is Circle's Tazapay acquisition and when will it close?

Circle agreed to buy Singapore-based cross-border payments platform Tazapay in a $400 million all-stock deal, Cointelegraph reported. The transaction is expected to close in 2027 and would support Circle's broader payments expansion.

How large is USDC circulation now?

USDC circulation reached $73.3 billion in the second quarter, up 19% from a year earlier. Circle earns income from the reserves behind USDC, making circulation growth important to its business.

How does USDC compare with Tether in 2026?

USDC remains behind Tether's USDt in market capitalization, but Bernstein said USDC has gained sharply in transaction activity. Its share of adjusted stablecoin transaction volume rose from about 40% in 2025 to more than 60% so far in 2026.

Sources

BIS Paper Finds Banks Can Slow Stablecoin Adoption by Raising Deposit Rates

BIS Paper Finds Banks Can Slow Stablecoin Adoption by Raising Deposit Rates

by | Oct 19, 2026 | Adoption

Banks may already hold a counterweight against stablecoins such as USDT and USDC: the interest paid on an ordinary savings account. That is the conclusion of a working paper released by the Bank for International Settlements on October 13, 2026, titled "Are stablecoins and bank deposits substitutes?" and issued as BIS Working Paper 1382 by Rashad Ahmed and Iñaki Aldasoro, according to Crypto Briefing.

The finding matters because it reframes the contest between banks and stablecoins as a pricing problem rather than a technology race. Reserve-backed stablecoins function as partial stand-ins for conventional deposits, the paper concludes, meaning the two products compete for the same pool of money, and that deposit pricing gives banks a degree of control over how quickly stablecoins spread.

What the Stablecoin Adoption Data Shows

The study drew on weekly U.S. figures covering January 2019 to June 2025. Aldasoro, a BIS economist, and Ahmed, of the Andersen Institute for Finance and Economics, determined that stablecoin expansion decelerates whenever banks lift what they pay depositors. That window covers a dramatic stretch for the sector, with stablecoin market capitalization climbing from less than $5 billion to more than $220 billion, Crypto Briefing reported.

Across the sample, stablecoin market cap grew roughly 15% over a typical 10-week stretch, the baseline against which the rest of the findings should be read. The central estimate shows that a single basis point added to deposit rates corresponds to about 3 percentage points shaved off stablecoin market cap growth across a 10-week span. A basis point is one hundredth of a percentage point, and the 3 percentage point figure comes from the authors' ordinary least squares estimates, Crypto Briefing reported.

Using instrumental variables estimates instead, the measured effect rises to about 9 percentage points. Decrypt and kucoin framed the same result in growth terms: a one-basis-point rise in deposit rates, sizable for savings rates that typically move slowly, trimmed average ten-week growth from about 15% to roughly 12% under the baseline estimate, and to about 6% under a second method designed to isolate cause and effect. In both cases, growth slowed but did not reverse, CryptoNews reported.

USDC More Exposed Than USDT

USDC absorbed the heavier blow, losing roughly 4.8 percentage points of growth for every basis point added to deposit rates, according to Crypto Briefing. USDT, by comparison, showed a reaction of 1.9 percentage points.

The authors attributed the difference to USDC's closer ties to U.S. users, a pattern they said was consistent with Circle's USDC being more integrated with the domestic banking system. The relationship was stronger for Circle's USDC than Tether's USDT, Decrypt and CryptoNews reported.

The pattern extended beyond tokens sitting in wallets. Stablecoins supplied to decentralized finance protocols showed the same sensitivity, while non-stablecoin crypto assets displayed no comparable response, with bank deposit rates having no significant effect on them, Crypto Briefing reported.

The 3% Threshold and the Rate Environment

The wider interest-rate backdrop adds another layer to the results. Above a federal funds rate of roughly 3%, the authors identified a nonlinear effect, Crypto Briefing reported. Savings rates barely move until the policy rate crosses about 3%, after which banks reprice them far more quickly, according to Decrypt and kucoin.

Near-zero rates leave depositors and stablecoin holders earning essentially the same thing: nothing. As rates climb, the spread between a yield-bearing deposit and a token that pays nothing grows too wide to dismiss, Crypto Briefing reported. The authors used that pattern in bank behavior to distinguish causation from coincidence, according to kucoin.

The sample stretches from the era of rock-bottom rates through the subsequent tightening cycle, a stretch during which the stablecoin sector expanded more than fortyfold. The research summary describes the mechanism as a pricing channel through which the banking industry can influence stablecoin demand, Crypto Briefing reported.

GENIUS Act Limits Issuer Response

The dynamic is now being codified into law. President Donald Trump signed the GENIUS Act in July of last year, a measure that effectively made stablecoins legal in the United States and laid down rules governing how they are issued, used and held in custody, according to Decrypt and kucoin.

The law includes a specific provision in Section 4(a)(11) stating that no permitted payment stablecoin issuer or foreign payment stablecoin issuer shall pay holders any form of interest or yield solely in connection with holding, using, or retaining a payment stablecoin, Forkast News reported. The rules take effect January 18, 2027, leaving issuers unable to match bank deposit rates head-on.

The prohibition applies only to the issuers themselves. Crypto exchanges and third-party platforms remain free to pay interest on stablecoins held on their platforms, creating a bifurcated market where the yield is decoupled from the underlying asset's issuance, Forkast News reported. Meanwhile, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation and the Treasury are writing rules to implement the GENIUS Act, according to kucoin.

Limits of the Research and What Comes Next

The BIS authors are explicit about the limits of what they can claim: the work does not establish losses of deposits or lending, and its sample covers a single high-rate episode, so the findings describe one rate cycle rather than a law of the market, according to CryptoNews and Forex Crunch. Working papers reflect the authors' views, not necessarily the BIS's, and the sample spans a single high-rate cycle in which stablecoins paid holders no interest, Decrypt and kucoin reported.

The authors said regulators should weigh whether stablecoin issuers may pay holders yield, along with the trade-offs of requiring issuers to keep part of their reserves in bank deposits, according to Decrypt and kucoin. Banks have lobbied to prohibit stablecoin yield, and the dispute was prominent during the Clarity Act's failed Senate vote, kucoin reported.

The scale of the potential substitution has been flagged before. Bank of America CEO Brian Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products offering returns, potentially reducing lending capacity and raising borrowing costs, according to CryptoNews and Forex Crunch. A December Federal Reserve staff analysis explained that money placed in stablecoins can return to banks as issuer deposits, changing who supplies banks' funding even when total deposits remain unchanged, CryptoNews reported.

For policymakers, the research summary notes that stablecoin adoption may be closely linked to the interest rates banks offer savers, and that the relationship carries implications for both monetary policy and regulation, Crypto Briefing reported. The next datapoint is the deposit-rate response: how quickly banks in major markets reprice savings products as policy rates shift, and whether stablecoin issuer yields widen or narrow the gap, according to Forex Crunch.

Conclusion

The established finding is narrow but pointed: higher bank deposit rates predict slower stablecoin market growth, the effect is stronger for USDC than USDT, and banks retain influence over adoption through deposit pricing. The paper does not show that stablecoins have reduced bank deposits or lending, and its sample covers one high-rate cycle. The next concrete steps are regulatory: the OCC, FDIC and Treasury are writing rules to implement the GENIUS Act ahead of its January 18, 2027 effective date, while the authors say regulators should weigh whether issuers may pay yield and the trade-offs of requiring reserves to sit in bank deposits.

Frequently Asked Questions

What did BIS Working Paper 1382 find about stablecoins and bank deposits?

The paper, published October 13, 2026 by Rashad Ahmed and Iñaki Aldasoro, found that stablecoins and bank deposits behave as partial substitutes. A 1 basis point rise in U.S. deposit rates lined up with roughly 3 percentage points less stablecoin market cap growth over 10 weeks, and about 9 points under instrumental variables estimates.

Why is USDC more sensitive to deposit rate increases than USDT?

USDC lost about 4.8 percentage points of growth per basis point of deposit repricing, versus 1.9 points for USDT. The authors attributed the gap to USDC's closer ties to U.S. users and institutions, suggesting the more integrated a stablecoin is with the domestic banking system, the more sensitive it is to that system's yields.

How does the GENIUS Act affect stablecoin issuers' ability to compete with banks?

Section 4(a)(11) of the GENIUS Act, signed in July 2025 and effective January 18, 2027, bars permitted payment stablecoin issuers from paying holders any interest or yield for holding their tokens. Exchanges and third-party platforms remain free to pay interest on stablecoins held on their platforms.

Does the BIS paper prove stablecoins drain bank deposits or lending?

No. The authors state the work does not establish losses of deposits or lending, only a correlation in growth patterns. The sample covers a single high-rate episode between 2019 and 2025 in which stablecoins paid holders no interest, so the findings describe one rate cycle rather than a permanent law.

What did Bank of America CEO Brian Moynihan warn about stablecoins?

Moynihan warned in January that as much as $6 trillion in deposits could move into stablecoins and related products offering returns, potentially reducing banks' lending capacity and raising borrowing costs. The BIS paper suggests that outcome is not fixed if banks reprice deposits competitively.

Sources

FCA Crypto Authorisation Gateway Opens as UK Brings Digital Assets Into Full Regulation

FCA Crypto Authorisation Gateway Opens as UK Brings Digital Assets Into Full Regulation

by | Oct 14, 2026 | How to Crypto

The Financial Conduct Authority opened its FCA crypto authorisation gateway on 30 September 2026, allowing firms to apply for permission to carry on newly regulated cryptoasset activities in the UK. The move brings crypto businesses operating in the country into full FCA regulation for the first time, with standards covering consumer protection, safeguarding of customer assets, market integrity and financial resilience.

The gateway was created under the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026, which amend the Regulated Activities Order to establish a new set of regulated activities directed at cryptoassets. The regime replicates for crypto businesses the regulation of familiar functions in traditional financial markets, including issuance, custody, trading venues, dealing, intermediation and certain staking services.

Deadlines and Transitional Arrangements

Businesses planning to keep serving the UK market must submit their applications through the FCA crypto authorisation gateway no later than 28 February 2027, with the full regime taking effect on 25 October 2027. The regulator has urged firms to file well ahead of that date instead of treating it as a target, according to JD Supra.

Submitting an application within the prescribed period allows an eligible existing business to benefit from statutory transitional provisions, continuing to provide cryptoasset services, including taking on new business, while the FCA reviews its application after the new regime commences. A firm does not need to have received final authorisation by the February deadline, but those applying after it may struggle to gain approval in time and could need to cease the relevant regulated activities until permission is obtained, JD Supra reported.

Decisions on applications filed within the window are expected ahead of the regime's start date, the regulator said. Applicants must show clearly that they satisfy the regulator's standards, and any firm unable to demonstrate this will be denied authorisation for the UK market.

How to Apply Through FCA Connect

Applications for Part 4A permission covering the new cryptoasset regulated activities can now be submitted via FCA Connect. Firms that already hold FSMA authorisation have the option of seeking a variation of permission instead, adding the relevant cryptoasset activities to what they are currently permitted to do.

A firm's existing regulatory status will not carry over into the new framework on its own. Registration with the FCA under the Money Laundering Regulations does not entitle a crypto business to an automatic Part 4A permission for the corresponding activity from October 2027, according to JD Supra. Businesses with current FSMA authorisation, or those supervised under the Payment Services Regulations or Electronic Money Regulations, must assess whether the permissions they hold extend to their cryptoasset work and seek a variation where they fall short.

The FCA is supporting firms to prepare for authorisation through pre-application discussions and webinars, which are available on demand. Its Pre-Application Support Service remains available, though the regulator expects meeting requests to come with substantive detail rather than promises to supply information at a later stage, JD Supra reported.

What the New Regime Requires

Crypto businesses caught by the rules will face oversight much like that applied to conventional FCA-authorised financial services firms. Obligations will span capital and prudential rules, standards for how business is conducted, governance, systems and controls, the Consumer Duty where it applies, plus regulatory reporting and ongoing supervision.

Senior staff at authorised firms will fall under the regulator's individual accountability framework, which encompasses the senior managers and certification regime. Governance structures must be proportionate to the nature, scale and complexity of each firm's activities, with clear allocation of senior-management responsibilities.

Issuers of stablecoins will face rules on how backing assets are safeguarded, under a new Client Assets Sourcebook (CASS) 16 chapter of the FCA Handbook. Custodians will face specific requirements concerning the safeguarding of client cryptoassets, and firms that outsource custody to third parties must weigh how those arrangements affect their own regulatory obligations.

Once authorised, firms come under continuing FCA oversight that includes reporting duties and information requests, alongside an expectation of open and cooperative dealings with the regulator. The FCA's existing enforcement toolkit will be available in relation to the new regulated activities, including financial penalties, public censures and restrictions or prohibitions where statutory conditions are satisfied.

Scope Reaches Overseas and Decentralised Businesses

A broad set of business models could be captured, spanning exchanges and trading venues, brokers and other intermediaries, custodians and wallet providers, stablecoin issuers, some market makers and principal dealers, and firms that arrange staking services. The perimeter analysis remains highly fact specific, according to JD Supra.

A firm whose principal place of business sits outside the UK may still fall in scope where it has UK employees or agents undertaking regulated dealing or arranging functions, or otherwise operates through substantive UK-based operations. That could include UK servers, UK-targeted marketing efforts or bank accounts. Regulation may also apply where relevant transactions are negotiated, arranged or executed in the UK or through a UK establishment, or where safeguarding arrangements involve the exercise of relevant control from the UK.

Technology providers, introducers, non-custodial businesses and decentralised protocols will need to consider carefully whether their particular activities satisfy the statutory definitions and territorial requirements, and whether an exclusion applies. Exclusions and exemptions will be considered on a fact-specific, case-by-case basis.

Preparing for Authorisation

Dominic Cashman, director of authorisation at the FCA, said the new regime will give consumers greater protections and firms a clear framework to operate in. The regulator said the framework reflects the government and FCA's determination that the UK's crypto sector should be defined by integrity and trust, along with growth and innovation.

The authorisation process is designed to establish that an applicant can meet FCA standards in practice, and policies that do not correspond to a firm's actual operating model are unlikely to be sufficient, according to JD Supra. Firms should compare their existing governance, financial resources, safeguarding, compliance, risk management, operational resilience and conduct arrangements against the FCA's final rules, and identify proposed senior managers with sufficient expertise and authority.

The FCA published its final crypto rules and guidance in June 2026, with the final rule package published on 30 June 2026 illustrating the scale of the transition, according to JD Supra. The regulator has confirmed the application of core handbook requirements to regulated cryptoasset firms and has published specific guidance on applying the consumer duty to the sector.

Conclusion

The opening of the FCA crypto authorisation gateway on 30 September 2026 starts the clock for crypto firms seeking to operate in the UK under full regulation. Existing businesses face a 28 February 2027 application deadline to benefit from transitional arrangements that let them continue operating while their applications are assessed, with the new regime taking full effect on 25 October 2027. Firms that cannot demonstrate they meet the FCA's standards on consumer protection, safeguarding, market integrity and financial resilience will not be authorised to operate in the UK market.

Frequently Asked Questions

When did the FCA crypto authorisation gateway open?

The FCA opened its authorisation gateway on 30 September 2026, allowing firms to apply for permission to carry on the new regulated cryptoasset activities created by the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026. Firms can apply through FCA Connect for Part 4A permission.

What is the deadline for crypto firms to apply for FCA authorisation?

Firms intending to continue operating in the UK should apply by 28 February 2027, ahead of the new regime coming into force on 25 October 2027. The FCA has encouraged firms to apply as early as possible rather than treating the February date as a target.

Can existing UK crypto firms keep operating while their application is assessed?

Yes. Existing firms that apply during the application period can continue providing cryptoasset services, including taking on new business, while their application is assessed if a decision has not been made before the new regime comes into force on 25 October 2027, under statutory transitional provisions.

Does FCA registration under the Money Laundering Regulations carry over to the new regime?

No. A crypto business currently registered with the FCA under the Money Laundering Regulations will not automatically receive a Part 4A permission to conduct the corresponding activity from October 2027. Existing regulatory status does not automatically migrate into the new regime.

Do overseas crypto firms fall under the UK's new crypto regime?

Potentially. A firm whose principal place of business is outside the UK may still fall in scope where it has UK employees or agents undertaking regulated dealing or arranging functions, or operates through substantive UK-based operations, which could include UK servers, UK-targeted marketing or bank accounts.

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