Stablecoins and tokenised assets are accelerating structural change across global capital markets, according to Morningstar DBRS, which has warned that banks and financial institutions must adapt quickly or risk disintermediation.
In its latest commentary, Morningstar said stablecoins are “a new chapter in financial disruption,” with recent legislation lowering the barrier for banks to enter the market. The GENIUS Act, signed into US law last month, introduces reserve and capital requirements for issuers, paving the way for regulated institutions to compete with dominant players such as Tether and Circle.
“Over time, large-scale adoption of stablecoins could cause deposit disintermediation and payment disruption for banks,” the report stated, noting that programmable digital currencies are increasingly used for cross-border payments, remittances and e-commerce. With settlement times measured in seconds and transaction costs below $0.01, stablecoins are outpacing traditional payment rails such as ACH and wire transfers.
Morningstar warned that branded stablecoins could incentivise consumers to move cash for convenience, rewards or embedded functionality, undermining banks’ ability to fund new loans. “Stablecoins are considered ‘programmable money’ because they can be embedded into smart contracts… allowing automated execution of financial operations,” the report said.
The commentary also highlighted stablecoins’ growing influence in short-term funding markets. Issuers have become major holders of US Treasury Bills, rivalling sovereign and institutional investors, it said.
“Large-scale purchases of US Treasuries by stablecoin issuers can affect yields on the short end of the curve,” Morningstar noted, adding that this could pressure banks’ own treasury portfolios and interest income.
Despite the risks, Morningstar sees strategic upside for regulated institutions. “Banks could serve as custodians of stablecoin reserves and manage US Treasury holdings for issuers,” the report suggested. Acting as intermediaries between issuers and the fiat system could generate new fee income and reinforce banks’ relevance in a digital-first financial landscape.
The broader context is one of accelerating tokenisation. Platforms such as STOKR and BPX are enabling the issuance and trading of tokenised securities, while asset managers including BlackRock and Franklin Templeton are piloting tokenised funds.
Morningstar’s framing was clear: digital assets are no longer fringe innovations — they are becoming foundational to the future of finance.
