Bank of England policymaker Megan Greene sent a chill through crypto markets last weekend. Speaking at a conference in Dubrovnik, Croatia, she declared that the surge in stablecoin popularity could prove short-lived. Tokenised deposits from traditional banks, she argued, stand ready to claim the crown.
“I think tokenised deposits are probably going to take over from stablecoins and five years from now, I suspect we might wonder why we were talking about stablecoins,” Greene told the gathering on May 31. Reuters reported her remarks in detail. The comments landed just as total stablecoin market capitalization hovers near $320 billion, according to on-chain data tracker DefiLlama.
Tether’s USDT still commands the largest slice with $188.18 billion. Circle’s USDC follows at $75.89 billion. USDT holds 58.77 percent dominance. Yet recent weeks show modest contraction. The overall supply slipped 0.85 percent over seven days. Issuance had already leveled off in prior months. Greene’s skepticism suddenly carries fresh weight.
She painted a contest among three contenders. The tortoise represents central bank digital currencies. Stablecoins play the hare, fast but perhaps fleeting. Tokenised deposits? They arrive as the rhino. Heavy. Inevitable. “We’ll probably end up with all three,” Greene said. “But if I had to put money in one … it would be the rhino.”
Her case rests on several pillars. Commercial banks risk losing deposits to these dollar-pegged tokens. Once they grasp that reality, they will accelerate efforts to issue their own digital versions. Fees once earned on traditional accounts would migrate. Banks won’t sit idle. And stablecoins, for all their growth, face questions. Questions around true stability. Regulatory clarity. Even illicit use.
Not everyone on the panel shared her outlook. Federal Reserve Governor Christopher Waller pushed back. He views stablecoins simply as payment tools. “I’ve always just looked at stablecoins as a payment instrument; there’s nothing evil about it, nothing dangerous about it,” Waller said. They inject competition into a space long dominated by slow, expensive rails. “These things are used for cross-border payments, and they are scaring the banks.” Banks lobby against them precisely because they threaten established turf.
The exchange highlights a deeper tension. One side sees innovation eroding bank balance sheets and complicating monetary policy transmission. The other sees efficiency gains that regulators should encourage rather than stifle. Greene believes banks will eventually fight to retain liquidity. When they do, tokenised deposits could eclipse non-bank stablecoins.
Yet fresh data and analysis paint a more layered picture. Stablecoin transfer volumes reached an estimated $46 trillion in 2025. That figure dwarfs PayPal by more than 20 times. It nearly triples Visa’s volume. It approaches the scale of the ACH network. a16z crypto outlined these metrics in early May while mapping six trends expected to shape 2026. The piece underscores how stablecoins have moved from niche trading collateral to mainstream rails.
Issuers continue expanding. New onramps connect stablecoins to local payment systems through QR codes, real-time rails and familiar card interfaces. Banks experiment with these tools to launch products without overhauling legacy mainframes. Some observers anticipate more on-chain origination of loans and assets rather than simple tokenization of off-chain holdings. These shifts suggest demand may evolve instead of evaporate.
Recent market behavior adds nuance. USDC outpaced USDT in adjusted 2025 transfer volume, logging $18.3 trillion against Tether’s $13.2 trillion according to Artemis data cited in recent coverage. That gap reached 39 percent. On-chain activity and active wallets also favor USDC in several analyses. Tether retains larger market capitalization and exchange liquidity, but usage patterns diverge. The dollar’s global pull remains the anchor. Over 99 percent of stablecoin supply ties to USD reserves.
Enterprise adoption gathers pace too. Payment firms, marketplaces and gig platforms integrate stablecoins for remittances, payroll and treasury management. Surveys show half of current holders increased positions in the past year. More than half plan further buys. Recipients in emerging markets report easier international business. Conversion happens quickly. Many holders spend or swap within days when merchant acceptance exists.
Still, Greene’s rhino may yet charge forward. Tokenised bank deposits carry built-in advantages. They sit inside regulated institutions. They inherit existing compliance frameworks. They avoid some of the peg-risk scrutiny that haunts even the largest stablecoins. If banks coordinate issuance at scale, the shift could accelerate. Central banks might favor them for smoother policy implementation.
But. The hare has momentum. Programmable money moves at internet speed. Settlement finality arrives in seconds, not days. Smart contracts automate compliance, FX conversion and conditional payments. Cross-border flows that once took expensive correspondent banks now clear near-instantly. For freelancers in Africa or Southeast Asia receiving 35 percent of income in stablecoins, the utility feels immediate.
Regulation will decide much of the race. Clarity in the United States and Europe could either cement non-bank issuers or tilt the field toward chartered banks. Yield-bearing stablecoins complicate the picture further. Some products already offer returns. Tokenised deposits might match or exceed them while promising greater safety.
Greene acknowledged coexistence remains possible. A market exists for CBDCs, stablecoins and digital deposits. The question centers on which gains the largest share of daily transactional volume. Five years feels distant in technology terms. Yet in finance, where infrastructure changes slowly, her timeline may prove realistic.
Market participants aren’t waiting to find out. Builders pour resources into better onramps and compliance tooling. Institutions test hybrid models that blend stablecoin rails with bank deposits. Payment volumes keep climbing even as headline supply growth moderates. The $320 billion capitalization, while below recent peaks, still reflects compound growth from levels below $10 billion only a few years ago.
So the debate continues. Waller’s defense of competition versus Greene’s warning about displacement. Data showing explosive volume against signs of supply plateau. Institutional interest colliding with bank self-preservation. The outcome won’t hinge on one conference remark. It will emerge from thousands of integrations, regulatory decisions and user choices over the coming quarters.
Tokenised deposits might indeed dominate institutional flows. Stablecoins could retain their edge in retail, DeFi and emerging-market remittances. Or the two may converge as banks issue tokens that settle across both traditional and blockchain rails. The hare runs fast today. The rhino hasn’t fully started. Observers would do well to watch both.
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