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From debanking to a banking arms race—The rise of stablecoins

Opinion by: Megan Knab, CEO, Franklin Payroll

There are few historical examples of such a massive about-face for an industry, from banks debanking crypto businesses to now embracing stablecoins. If you talk to most crypto startup founders or companies with crypto on the balance sheet, they will all have war stories about finding, applying for and maintaining bank accounts. 

Over the past three years, over half of debanking complaints have been lodged against four American banks — Bank of America, JPMorgan, Wells Fargo and Citibank. Now, as the policies that discriminated against the crypto industry, like “Operation Chokepoint 2.0” and the recision of controversial accounting rule SAB 121, have been repealed, a new openness to blockchain technology from the finance sector is possible. 

It is imperative that the banking industry stop shunning crypto and start — at least understanding it — to stay competitive. How stablecoins are deployed will separate the banking winners and losers. 

From debanking to stablecoins 

Of course, stablecoins are not a new concept. For years, large institutions like JPMorgan and Santander have experimented with stablecoins and blockchains. Those experiments were around small functions like internal treasury reconciliation and interbank settlement. Much of this was also on private blockchains created by those banks. Implementing digital dollars on private chains, however, misses out on the core innovation of stablecoins.

While the use case of stablecoins for international remittances is clear, we are just scratching the surface of the power of stablecoins on public networks. For example, stablecoins eradicate unauthorized payment disputes and enable far faster pay cycles. 

Payroll payments are also complex. Payday is a web of thousands of automated clearing houses, wires, comma-separated values and PDFs. The programmability of stablecoins enables companies to create efficiency among all these data structures, processing times, reconciliations and paycheck reporting. 

Many smaller banks are just now waking up to the opportunity to incorporate permissionless, public network stablecoins into their workflows. Similar to how many businesses started to investigate how AI might change their businesses with the 2022 release of ChatGPT, so too are banks needing to look at how stablecoins will upend money movement.

 Recently, Custodia Bank issued its own stablecoin, Avit, on Ethereum. Custodia’s users can access quick, cheap banking services that are hard to beat. This is an excellent example of implementation for other financial institutions to follow.

Stablecoin adoption is increasing as the tech keeps improving

Active stablecoin wallets increased from 19.6 million in February 2024 to over 30 million in February 2025, according to Artemis and Dune. US President Donald Trump hopes to have stablecoin legislation on his desk by August 2025. Wyoming already did so in late March 2025.

Recent: Mastercard links with Circle, Paxos for merchant stablecoin payments

Stablecoin infrastructure has improved significantly, and there is increased confidence in the security of stablecoins. 91% of the supply of stablecoins is fiat-backed, and only 8.5% are backed by collateralized crypto assets. Riskier algorithmic stablecoins have gone out of vogue.

Incremental changes also make it easier for non-crypto businesses to use stablecoins. There are now simple solutions for many of the original UX problems with stablecoins.

Additionally, more assets are moving onchain. Using stablecoins on public networks like Ethereum, payment companies will be better prepared to serve the future financial system. It’s not just stablecoins that are updating the financial system, either. Earlier this year, BlackRock CEO Larry Fink said on Squawk Box he wants the SEC to “rapidly approve the tokenization of bonds and stocks.”

For banks looking for a competitive advantage in a world of powerful fintechs, shifting interest rates and lower consumer savings, using the power of stablecoins to improve their products and their internal operations might be the most powerful decision they make. 

Opinion by: Megan Knab, CEO, Franklin Payroll.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts, and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

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Wall Street’s next crypto play may be IPO-ready crypto firms, not altcoins

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Wall Street’s next crypto play may be IPO-ready crypto firms, not altcoins

Wall Street’s next crypto play may be IPO-ready crypto firms, not altcoins

Wall Street capital is flowing into late-stage, IPO-ready crypto firms, signaling new dynamics at play for the incoming altcoin season.

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CBDCs vs stablecoins: Kazakhstan says Evo not a rival to digital tenge

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CBDCs vs stablecoins: Kazakhstan says Evo not a rival to digital tenge

CBDCs vs stablecoins: Kazakhstan says Evo not a rival to digital tenge

Kazakhstan is advancing a dual model by piloting its digital tenge CBDC alongside the Evo stablecoin as part of its push to become a crypto hub.

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Met Police calls for protest against Palestine Action ban to be cancelled after Manchester synagogue attack

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Met Police calls for protest against Palestine Action ban to be cancelled after Manchester synagogue attack

The Metropolitan Police has called for a planned protest in support of the banned Palestine Action group to be delayed or cancelled after Thursday’s synagogue attack in Manchester.

In a statement, the force said it wanted to deploy every available officer to protect Jewish communities, but was instead having to prepare for Saturday’s planned gathering in London’s Trafalgar Square.

Palestine Action was banned under anti-terrorism laws in July.

Politics latest: Mahmood says pro-Palestinian protests ‘dishonourable’ after Manchester attack

“The horrific terrorist attack that took place in Manchester yesterday will have caused significant fear and concern in communities across the UK, including here in London,” the Met said.

“Yet at a time when we want to be deploying every available officer to ensure the safety of those communities, we are instead having to plan for a gathering of more than 1,000 people in Trafalgar Square on Saturday in support of a terrorist organisation.

“By choosing to encourage mass law breaking on this scale, Defend Our Juries [the protest organisers] are drawing resources away from the communities of London at a time when they are needed most.”

But Defend Our Juries, which has led demonstrations against the ban on Palestine Action, said it planned to go ahead with the march.

A statement from the group on social media said: “Today, the Metropolitan Police wrote to us to ask that we postpone Saturday’s mass protest in Trafalgar Square, citing ‘significant pressure on policing’.

More on Palestine Action

“Our response in short: Don’t arrest us then.”

It comes after the home secretary criticised separate pro-Palestinian protests held last night as “fundamentally un-British” and “dishonourable”.

A demonstration – held to protest the Israeli navy halting a flotilla carrying aid to Gaza – was held in London’s Whitehall on Thursday evening, hours after the attack in Crumpsall that killed two Jewish men.

The Metropolitan Police said 40 people had been arrested in the course of the protest, six of whom were arrested for assaults on police officers.

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Mahmood ‘disappointed’ with pro-Palestine protests

Speaking to Anna Jones on Sky News Breakfast, Shabana Mahmood said she was “very disappointed” to see the protests go ahead, given the context.

“I think that behaviour is fundamentally un-British,” she said. “I think it’s dishonourable.”

She said the issues that had been driving the pro-Palestine protests have been “going on for some time” and “don’t look like they’re going to come to an end any day soon” – but that those behind the demonstrations could have taken a “step back”.

“They could have stepped back and just given a community that has suffered deep loss just a day or two to process what has happened and to carry on with the grieving process,” she said.

“I think some humanity could have been shown.”

Any further protests must “comply with the law and, where someone steps outside of the law of our land, they will be arrested”, the home secretary warned.

She added: “And to anybody who is thinking about going on a protest, what I would say is, imagine if that was you that has had a family member murdered on the holiest day in your faith. Imagine how you would feel and then just step back for a minute, give people a chance to grieve.

“We can get back to our protests later – just because you have a freedom doesn’t mean you have to use it.”

However, Zack Polanski, the leader of the Green Party, accused the home secretary of being “deeply irresponsible” for her comments about pro-Palestine protests.

“I think ultimately conflating protests against the genocide in Gaza and ultimately weaponising that against an anti-Semitic attack on our streets, a terrorist attack, is deeply irresponsible,” he told Sky News Breakfast.

The Green Party leader said it was “worrying when governments are increasingly trying to crush down dissent” and using “what is a brutal attack… to try and make a point about protest”.

“We need statesmanship at this moment. We need responsibility,” he added.

The two men killed outside the Heaton Park Hebrew Congregation Synagogue in Thursday’s attack have been named by police as Adrian Daulby, 53, and Melvin Cravitz, 66.

The suspect has been named as Jihad al Shamie – a 35-year-old British citizen of Syrian descent.

He is understood to have been granted British citizenship in 2006 when he was around 16 years old, having entered the UK as a young child.

Ms Mahmood confirmed to Sky News that the perpetrator was not known to counter-terror police and that he had not been referred to the government’s anti-terrorism scheme Prevent.

Three other people – two men in their 30s and a woman in her 60s – have been arrested on suspicion of the commission, preparation and instigation of acts of terrorism.

Read more:
What we know about the attack
Starmer vows to ‘wrap arms’ around Jewish community

Asked if she was concerned about further attacks, Ms Mahmood said the government was on “high alert”.

She said there had been an increase in police resources not just in Manchester but across he country.

“We as a government want to make sure that people feel safe going about their business today; so people will see an increased police presence, particularly around synagogues and other places of interest for the Jewish community,” she said.

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