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NY Fed: Banks Holding Stablecoin Deposits Are Lending Less | PYMNTS.com

The New York Fed finds stablecoins prompt banks to hold more reserves and lend less.
Post-SVB period shows banks with stablecoin partners had higher reserve volatility and interbank payments.
The study estimates about a 14 percentage point drop in loan-to-asset ratio for treated banks.
Stablecoin activity increases intraday volatility in partner banks’ reserve balances.
Stablecoins create liquidity shocks transmitted through the banking system.
The study argues digital payments innovation flows through the traditional financial system.
Some banks remain cautious as stablecoins scale and integration grows.
Post-SVB period led to new partnerships between stablecoin issuers and banks.
New York Fed links stablecoins to changes in bank balance sheets and credit creation.
Policymakers are urged to consider liquidity dynamics as digital dollars enter mainstream use.
The research sits alongside another NY Fed report on tokenized deposits and stablecoins.

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