Stablecoins and Credit Unions: Five Strategic Questions Leaders Should Be Debating Now

Stablecoins are moving quickly from a niche crypto concept to a serious topic in mainstream payments and money movement. Designed to hold a steady value, stablecoins are increasingly being tested as a new way to settle transactions, move funds across platforms, and support tokenized forms of finance.

Stablecoins matter now because policy and industry are converging. New legal and supervisory expectations are clarifying what a payment stablecoin is, what backing and governance are required, and what claims are prohibited. Some rules also limit the ability to pay interest to stablecoin holders, which can influence how quickly balances migrate. Tokenization is also moving from concept to build: institutions and vendors are testing how money, assets, and settlement can be represented digitally, and stablecoins are often positioned as a potential settlement instrument inside those tokenized workflows.

For credit union leaders, the question is not whether to launch a stablecoin tomorrow. The real issue is what stablecoins could mean for deposits, payments revenue, member relationships, and the future shape of financial infrastructure. Stablecoins intersect with fintech partnerships and vendor choices, consumer offerings such as wallets and P2P, and cross-border or commercial payments where speed and predictability matter. Just as importantly, stablecoins bring governance issues to the surface, including member clarity on protections and recourse, compliance and fraud exposure, operational resilience, and the risk that third-party distribution could reshape who owns the member relationship. If stablecoins remain mostly a back-end tool, the impact may be limited. If they become embedded in the wallets and platforms members already use, the implications could be much larger.

This point-counterpoint brings together two Filene Research Institute fellows, Dr. Lamont Black from the Credit Union of the Future Center of Excellence and Dr. Henry Kim from the All Things Payments Center of Excellence, to debate five strategic questions that credit union boards and executives should be asking now—a practical starting point to assess stablecoin risk and opportunity without getting lost in technical detail. These questions are not exhaustive, but they offer a practical starting point for credit unions beginning to think seriously about stablecoins within the broader shift toward tokenized finance and faster, more programmable money movement.

Stablecoins could create real pressure on credit unions, but whether that shows up as meaningful deposit leakage depends on how deeply they penetrate everyday consumer wallets and payment flows. The debate is less about whether deposits move at all and more about timing, incentives, and how structural the shift in member behavior ultimately becomes.

If stablecoins grow, is the main impact on credit unions “deposit leakage,” or is that risk overstated?

I do not think the risk of deposit leakage is overstated, but I do think it is conditional on how stablecoins are ultimately adopted. If stablecoins remain primarily a back-end settlement tool used by financial institutions, then the direct impact on consumer balances may be limited. However, if stablecoins become embedded in large consumer platforms and digital wallets, then even partial migration of balances could matter for credit unions that depend heavily on deposits as a low-cost funding source. 

What often gets overlooked in this discussion is that deposits and payments are linked. If more transactions shift from cards to stablecoin-based payments, that does not just affect balances, it also affects interchange revenue. So the combined risk is not only where members store value, but how they move it. Even modest shifts in either dimension can have meaningful financial implications, especially for smaller institutions. 

That does not mean every dollar will leave deposit accounts, but it does suggest that credit unions should treat stablecoins as a potential structural change in how money is held and spent, not just a technical upgrade to settlement rails. From a strategic perspective, it is prudent to assume some level of behavioral change and plan accordingly, rather than assuming deposits and card-based payments will remain untouched.

I agree with Lamont on the basic logic that deposit leakage only becomes meaningful if two things happen. First, stablecoins have to show up inside the wallets and apps your members already use every day. Second, members need a real reason to keep balances there instead of in insured deposit accounts.

My counterpoint is that this still doesn’t look like the default path. Most stablecoin growth so far has been driven by back-end crypto activity: trading, exchange settlement, and moving collateral. Getting from that world to everyday consumer spending is a different hill to climb, and it depends heavily on regulation, consumer protections, and how the products are designed and distributed.

Under the GENIUS Act framework, stablecoin owners can’t simply be paid interest or yield for holding coins. There’s still an active debate about whether platforms will be allowed to recreate “yield-like” rewards indirectly, but the core point stands that if you can’t offer straightforward yield, it’s harder to create the kind of sustained balance-holding behavior that drives real deposit migration.

Even if stablecoins do get popular, deposits can remain sticky for very practical reasons. Members use deposit accounts for payroll, bill pay, autopay, loan relationships, and peace of mind tied to insured accounts and familiar dispute processes. Leakage is a risk, but it would take a pretty big shift in wallets, incentives, and acceptance to make it material, so it’s likely not a near-term (i.e., up to 18 months) high risk.

Stablecoins could reshape U.S. payments if merchants and major platforms actively push them, but that outcome depends on whether cost savings translate into visible consumer incentives. The core debate is whether stablecoins become a competitive checkout alternative that changes behavior at scale or remain mostly back-end infrastructure with limited near-term impact on how Americans choose to pay.

Do stablecoins meaningfully change the U.S. payments game, or are they mostly a back-end change that won’t move consumer behavior?

Payments behavior tends to follow convenience and cost, not underlying technology. Today, many merchants pay significant processing fees to accept cards, and increasingly those costs are being passed on to consumers through card surcharges or higher prices. If stablecoin payments offer merchants a materially lower-cost alternative, merchants will have strong incentives to promote them at the point of sale, even if consumers are not actively asking for new payment methods.

This is especially important given that stablecoins operate through digital wallets, which are already familiar to consumers. From a user experience perspective, paying with stablecoins can feel like using digital cash: fast, peer-to-peer, and not tied to traditional card networks, but still integrated into mobile apps and online checkout flows. If using stablecoins becomes both easy and financially rewarding, consumers are likely to follow those incentives.

The GENIUS Act also opens the door for non-financial companies to issue or distribute stablecoin-based payment options. If large platforms or retailers like Amazon or Walmart choose to offer discounts or loyalty incentives for stablecoin payments, that could meaningfully shift consumer behavior. In that scenario, stablecoins are not just a back-end settlement improvement, but a visible and competitive payment alternative that reshapes how transactions happen at scale.

I agree with Lamont, but his case is mostly the merchant-side view of stablecoins’ promise. Right now, I believe the consumer side matters more; and for most consumers, stablecoins still look like a back-end rail, not something that changes how they decide to pay.

The “pain gaps” for everyday U.S. consumers are not that compelling. In recent remarks to investors, Visa’s CEO pointed out that in developed world markets people already have plenty of easy ways to pay digitally from bank accounts, and that Visa does not see strong product–market fit for stablecoin-based consumer payments today. That’s not a crypto critique. It’s an adoption critique. Switching costs are real when the current experience already works. Even Mastercard’s more constructive perspective frames stablecoins as infrastructure they can support inside the network, not a near-term checkout revolution.

You can say, “Of course Visa and Mastercard would say that,” but these sentiments are echoed in research from US, Canadian, and EU central banks. U.S. retail stablecoin usage is still limited, while the more compelling value shows up in specific niches like cross-border payments, remittances, and as a workaround in countries with weaker banking rails or high inflation.

Near term, I don’t see stablecoins moving the needle that much for U.S. consumers. I’m not going to over-forecast beyond that, though, since payments innovation can turn quickly—for example, if behemoth retailers like Amazon and Walmart fully commit to stablecoins and see success. 

The strategic choice for credit unions is not simply whether to wait or rush in, but how to prepare without overcommitting in a fast-evolving market. The debate centers on balancing readiness and experimentation today with disciplined restraint, while recognizing that certain institutions may have stronger near-term reasons to lean in earlier than others.

For credit unions, is the best posture “wait and integrate later,” or “participate early to avoid being disintermediated”?

I do not think the right choice is between waiting passively or rushing into full implementation. “Wait and see” often reflects a hope that the issue will not materialize, and it underestimates the cost of being unprepared if adoption accelerates. If stablecoin usage grows quickly and an institution has not built internal understanding or technical readiness, it may be forced into reactive decisions simply to defend against disruption.

At the same time, this is not the moment for most credit unions to commit to specific vendors or lock into a single implementation path. The market for stablecoin infrastructure, custody, wallets, and integration tools is evolving rapidly, and the best options in the near future may look very different from what is available today. Issuing a proprietary stablecoin is only one possible strategy, and for most credit unions it probably is not the right approach. What matters more right now is understanding the range of strategic options and the tradeoffs among them.

This is why I view the current phase as one of strategic exploration rather than execution. With the GENIUS Act now law and NCUA guidance expected by mid-2026, expectations for real-world deployment are moving closer. That makes this the right time for education, leadership alignment, and cross-functional discussion, along with small-scale experimentation such as hands-on use of digital wallets. Just as importantly, credit unions should be working together, sharing insights, and developing common approaches, so that preparation happens at the system level rather than institution by institution.

On this question, I very much agree with Lamont. Let me offer a “friendly amendment” perspective. For most credit unions, I believe “explore, don’t commit” is still the right stance. But there are parts of the credit union landscape where the better move is to lean in earlier, because members stand to benefit from stablecoin’s clearest near-term use cases (e.g., cross-border payments, remittances). Where a credit union serves a member base with meaningfully higher needs in these cross-border payment flows and is hearing real pain around cost, speed, or availability, it makes sense to take a more forward-leaning posture now—at least through targeted pilots and readiness work—rather than waiting for the broader market to settle and standardize.

Last summer, I stated to Barron’s magazine that “stablecoins are likely to have far greater consequences when it comes to business between companies.” McKinsey has recently weighed in with the same perspective: the strongest near-term use cases skew toward B2B and institutional workflows, where stablecoins can reduce settlement friction, enable 24/7 movement of value, and streamline cross-border processes. (Businesses feel these cross-border pain points more acutely than consumers, given forex spreads, intermediary fees, and working-capital delays.) Thus, I would argue that the “participate early” case can also be compelling for corporate credit unions. They sit closest to inter-institution settlement and liquidity workflows and are well positioned to run controlled pilots that produce reusable playbooks for their member credit unions and the broader industry. 

For boards, the trade is less about choosing a winning rail and more about sequencing investments between near-term performance gains and longer-term infrastructure risk. The core question is how to strengthen instant payment capabilities today while maintaining disciplined oversight and readiness in case blockchain-based models materially reshape how value moves in the future.

How should boards evaluate the trade: invest in RTP/instant payments use cases now vs. build stablecoin capability as a hedge?

From a board perspective, this question is really about balancing near-term operational improvements with longer-term infrastructure risk. Systems like RTP and FedNow represent important progress, and credit unions should not ignore them. Many institutions still question whether their members truly demand instant payments today, and that may be true for some segments. But we are living in an era of instant everything, from same-day delivery to on-demand streaming, and it is unlikely that expectations for money will remain exempt from that broader shift in consumer behavior.

At the same time, RTP and FedNow are best understood as faster versions of existing payment infrastructure. They still rely on separate ledgers, messaging, clearing, and settlement processes, even if those steps happen more quickly. Stablecoins are fundamentally different. By operating on shared ledgers, stablecoins combine payment and settlement into a single process, removing the need for reconciliation altogether. This is not just a new rail layered onto existing systems, but a different architectural model for moving value.

Ultimately, this becomes a governance question about how boards manage technology and business-model risk. If blockchain-based systems continue to mature, they have the potential to change how value is transferred, recorded, and automated across digital markets. In that scenario, stablecoins may not simply compete with instant payments but could leapfrog them, much as mobile technologies leapfrogged landlines. For boards, the answer is not choosing one path exclusively but ensuring that investments in current rails are paired with strategic exploration of emerging ones, so the institution is not caught unprepared if the infrastructure landscape shifts more dramatically than expected.

I like Lamont’s framing of traditional rails like RTP and FedNow versus blockchain-based rails like stablecoins. Where I would take it further is that boards should not make this a debate about which rail wins. It should be a decision about which use cases matter for their credit unions, and what it will take to deliver them safely and reliably.

For most credit unions, RTP and FedNow are less about technology and more about execution. Buying access through a processor is the easy part. The real work is making instant movement of funds work without creating fraud losses or member confusion. That means real-time risk controls, clear handling of mistakes and disputes, and some form of after-hours coverage when issues show up. If the credit union has near-term use cases where speed clearly improves the member experience, then investing in instant payments tends to be the most straightforward choice because members feel the benefit and the institution strengthens day-to-day operations.

Stablecoins should be evaluated differently. For most credit unions, I’ve argued for a more conservative posture until there is tangible evidence of meaningful consumer uptake in the wallets and platforms members already use. Until that shows up, a major build risks adding cost and complexity without a clear member payoff. The practical move is to stay educated, do partner and vendor diligence, pressure-test deposit and payments economics under different adoption scenarios, and run small pilots only when there is a clear near-term need. 

The takeaways for the board are to anchor the discussion in use cases, fund capabilities that improve performance and risk control today, and set explicit triggers for when stablecoin work should move from monitoring and testing to real investment.

Stablecoins present both economic risk and potential opportunity for credit unions, raising questions about deposit stability, interchange pressure, and the durability of existing revenue models. The broader issue is not just whether stablecoins generate new fees, but whether credit unions adapt their capabilities and trusted role in time to remain competitive as payments and financial infrastructure evolve.

Do stablecoins create a credible new revenue model for credit unions, or is the economics story weak?

Stablecoins represent both disruptive risk and strategic opportunity for credit unions. If stablecoin adoption contributes to deposit migration, that can affect lending capacity and interest income. If more transactions move away from cards, that can also pressure interchange, which remains an important source of non-interest revenue. From that perspective, stablecoins are not just a technology issue, but a business-model issue that directly affects how credit unions generate income.

At the same time, stablecoins create new opportunities to serve members in how they move and manage money. Credit unions do not need to be issuers to participate economically. A more practical role for most institutions is helping members move safely and conveniently between traditional deposits and stablecoin-based payment networks. If members can see and manage stablecoin balances alongside their share accounts, use them for peer-to-peer transfers, and make merchant payments through familiar mobile apps, the credit union remains embedded in everyday financial activity. Services such as wallet access, transfers, and support can become new sources of fee-based revenue tied to active usage.

Ultimately, money is about trust, and trust is credit unions’ core value proposition. As payments become more digital and more peer-to-peer, members will still want institutions that help protect them from fraud, resolve problems, and provide guidance when things go wrong. While stablecoins themselves may be commodities, the member experience is not. Credit unions that lean into that trusted-advisor role and extend it into new payment technologies have an opportunity not only to defend against disruption, but to remain central to how members manage their financial lives. 

I think it is more constructive to reframe this question. Rather than focus on near-term revenue replacement, the central issue is strategic survival and long run competitiveness during a major technology shift.

Credit unions are not facing one isolated innovation tied to stablecoins. They are operating in a broader wave that includes AI adoption, real time settlement expectations, programmable payments, and rising competition from digitally native competitors, such as Coinbase, and non-traditional competitors, such as large retailers entering payments. In that environment, asking whether stablecoins generate immediate standalone revenue misses the larger decision. The key question is whether institutions can afford not to build stablecoin and related capabilities into their future operating model. 

Once the strategic horizon moves beyond the near term, where there is still time to learn and experiment, this wave is likely to compress interchange margins even if consumer stablecoin adoption remains limited. If adoption accelerates, deposit migration becomes a real possibility. Even if migration is modest, many experts expect stronger competition in deposit rates, which would benefit consumers while narrowing a traditional advantage credit unions have often held. 

I strongly agree with Lamont that trust is the credit union’s core advantage. I also agree that many institutions can eventually use that advantage to build new and profitable products and services. The priority is to stay viable and competitive through the technology shift so credit unions are positioned to translate trust into the next generation of member-focused innovation.

Stablecoins sit at the intersection of payments innovation, deposit competition, and the evolving infrastructure of tokenized finance. Lamont Black emphasizes the longer-term risk that stablecoins could reshape where value is stored and how transactions flow, especially if large consumer platforms adopt them at scale. Henry Kim offers a more cautious view of near-term consumer demand, arguing that stablecoins are more likely to show up first as behind-the-scenes infrastructure, with clearer early use cases in cross-border and institutional payments. 

Both perspectives point to the same practical takeaway: credit unions cannot afford to ignore stablecoins, even if widespread adoption is not immediate. The right posture for most institutions is disciplined readiness. That means building internal understanding, strengthening governance and partner oversight, investing in instant-payments capabilities that matter today, and setting clear triggers for when stablecoin pilots or integrations become necessary. Leaders should connect stablecoin scenarios to the member journey and to the balance sheet: how money moves, who controls the interface, and whether trust is reinforced or diluted. 

The five questions explored here provide an entry point for strategic planning. Stablecoins are not the only disruption facing credit unions, but they are part of a broader shift in how money may move in the future. Leaders who start engaging now will be better positioned to protect member trust, adapt to new rails, and remain central in the next era of payments.