October 20, 2026
Three stablecoin developments bankers should know about

The Stablecoin Banker is a periodic newsletter keeping bankers on top of the stablecoin industry. I highlight top stories that are relevant to banks, with my insights and commentary to draw out the most important conclusions.

If you find this content useful, please feel free to forward it to your friends and colleagues. They can also subscribe directly or read back issues at thestablecoinbanker.com. If you're interested in stablecoin services for your bank, feel free to reach out to us at Omnia.

"Congress did not create the national trust charter as a side door into the banking system for crypto firms."
— Rebeca Romero Rainey, ICBA President and CEO (Oct. 2, 2026)

In This Issue

• ICBA Can Win Its Lawsuit and Still Lose the Fight
• The Stablecoin Panic Outran the Stablecoin Market
• Samsung Built a Bank Account and Called It a Wallet

Plus, tidbits you may have missed in our Coupon Clippings section.

ICBA Can Win Its Lawsuit and Still Lose the Fight

On October 2, the Independent Community Bankers of America sued the OCC in federal district court in Washington, D.C., arguing the agency exceeded its authority under the National Bank Act by allowing national trust banks to conduct substantial non-fiduciary activities. The suit asks the court to declare unlawful the OCC's March 2, 2026 final rule, which confirmed that national trust banks can do non-fiduciary work, and Interpretive Letter 1176, which pre-dated the final rule and asserted that national trust banks may conduct any activity that is permissible for a state chartered trust. The suit also asks the court to vacate the conditional charter approval granted to Protego Holdings. Three days later, two more firms applied for national trust charters: Modern Treasury, to custody stablecoins and fiat alongside its payments software, and stablecoin card platform Rain, to custody assets, manage stablecoin reserves and issue stablecoins under the GENIUS Act. Neither proposed bank would take deposits or make loans. Sources [ICBA, Modern Treasury, Rain]

My Take:

ICBA's suit is a serious case worth watching, since it touches federal preemption, the limits of congressional delegation and how courts will read the GENIUS Act. But even a win would reroute the competition, not stop it.

The case centers on whether Congress meant national trust banks to do non-fiduciary work. That category is far broader than fiduciary services, covering payment processing, holding stablecoin reserves and safekeeping client assets, and it is where most of the new applicants, Modern Treasury and Rain included, expect to do their business. The list grows if the Fed stands up its proposed payment account. Austin Campbell expects ICBA to lose, arguing that a 1978 amendment and the GENIUS Act both assume national trusts can do custody, and citing decades of operational history for 60+ trust charters with more than $2 trillion of assets that, according to the OCC, "frequently conduct non-fiduciary custody activities."

If ICBA prevails, Protego, which received its conditional approval in February, would likely lose its charter, and any future trust charter would be confined to fiduciary work, a much more limited scope that is generally not useful for the emerging non-depository business models. The other approved charters would presumably stand unless someone sues over them too. However, the suit doesn't stop the applicants entirely. Instead, they could move to state chartered trusts, which have a long history of non-fiduciary activity, even though they lack the federal preemption benefits of a national charter. ICBA will find that mole much harder to whack, because its own members hold those charters.

The suit is the latest salvo against an evolution many other countries have already made: peeling payments out of depository banks. The bank lobby argues that lighter-regulated firms make these activities unsafe, without admitting that banks are heavily regulated because of the deposit-and-lend model, not because of the services new competitors want to provide. I also think banks overstate the threat. It's true that entry and operating costs are lower for the trust charters, but they also forego net interest margins, which means they won't be as profitable. These charters will compete with each other on rates, passing through as much of the underlying t-bill yield as possible, and will have far less revenue to offset fees in the way that banks do today, meaning customers may be surprised to see new service fees. I'm sympathetic to the uncertainty that a new style of entrant injects into the competitive landscape, but their structure presents both opportunities and limitations for attracting deposits out of banks.

Bankers out there should follow this case to understand the trajectory of the OCC and non-fiduciary charters. If the ICBA prevails, don't assume the path is fully closed. With GENIUS in place, there is a strong incentive for players to figure out the state pathway, so banks need to assume that one way or another, there will be more competition for deposit services.

The Stablecoin Panic Outran the Stablecoin Market

The Conference of State Bank Supervisors released its annual survey of community banks, fielded April 15 to July 15. Close to 60% of respondents rated deposit erosion and reduced lending capacity as the "most" or "moderately" impactful effects of stablecoin adoption. Fully 16% said they plan to offer stablecoin services in the next 12 months and 18% said the same for tokenized deposits. On October 5, the Bank of North Dakota launched Roughrider Coin, a "U.S. dollar-backed, tokenized digital asset" for near-real-time settlement between North Dakota banks and credit unions, issued by VersaBank on Solana through Fiserv's newly live digital asset platform. Fiserv, which said in June 2025 that its FIUSD stablecoin would launch by year-end, now has no launch date and has moved from Paxos and Circle toward a more proprietary coin. On its October 13 earnings call, Wells Fargo CEO Charlie Scharf said "use cases in the US for stablecoins remain unclear, but we're building solutions to be prepared," as the bank expands the tokenized deposits it launched for commercial clients in September and joins 20 other institutions planning a U.S. dollar token for the first half of 2027. Sources [CSBS, Bank of North Dakota, Banking Dive, crypto.news]

My Take:

The CSBS survey paints a picture of serious concern over stablecoins, and suggests this may be the year in which community banks start launching stablecoin products. In reality, it overstates both, and Wells Fargo, Fiserv and North Dakota are the evidence.

The headline number, that close to 60% of community banks see deposit erosion as a major effect of stablecoins, rests on a foundation of sand. First, the concern could not have been backed by material evidence. From July 2025 to July 2026, stablecoin supply grew by only about $50 billion, roughly 1% of the deposits held by ICBA member banks. All of that growth came between July and October 2025, and global supply has been flat ever since. The question asked about effects of something that could not have happened yet for 60% of banks. Finally, the survey closed in July, before midterm election predictions swung to the left, which might benefit anti-crypto sentiment in Congress, and before the CLARITY Act failed in the Senate.

The action-oriented questions tell the truer story. About 81% of respondents have no plans to offer stablecoin services in the next 12 months, and only 16% do. If 60% of banks believe stablecoins threaten their deposits, it is striking that most of them plan to do nothing about it. Another example: six of the 330 banks said they had tokenized deposits live as of July. The only way I can back into that number is by counting any bank with internal 24x7 clearing, a product that doesn't remotely serve the use cases stablecoins enable. Excluding those, I can think of one or two banks that legitimately count. My read is that most banks haven't yet done the work to understand stablecoins or tokenized deposits. Their fear is far greater than their momentum.

The banks that are moving show the same caution. The Bank of North Dakota calls Roughrider a "tokenized digital asset," not a stablecoin or a tokenized deposit, even though it has been called a stablecoin at times over the past year and Fiserv's launch release still calls it one. The reason is that the asset itself is malleable. Today, it works as a real-time core that lets BND's respondent banks transact 24x7, the interbank job I said in June was better suited to a deposit token. But rather than simply implement a real-time core, BND bet on a tokenized asset that could expand beyond its four walls later. Avoiding the label preserves that optionality, at the risk of greatly confusing the market. It also lets Roughrider skip the conventions of a well-run stablecoin, like a public website and a reserve report. Because the coin is issued by a bank, VersaBank, questions abound: whether it is simply a tokenized liability of that bank, whether its reserves are FDIC-insured, and what the coin guarantees its holders. Those questions are answered only in private.

Fiserv, which stunned the market in June 2025 with a spate of stablecoin announcements, is now pulling back from FIUSD indefinitely. Fiserv hasn't explained the delay, but I suspect it has something to do with how bank demand materialized, or didn't. Wells Fargo, meanwhile, is pushing ahead on two fronts: its own tokenized deposits for 24x7 commercial banking, and a stake in the 21-institution consortium token aimed at cross-border payments and digital asset settlement. Even so, Charlie Scharf told analysts that US use cases "remain unclear."

Tokenized money products have not arrived with the vigor that last year's stablecoin panic suggested. That is not a reason for community banks to relax and ignore the space. Stablecoin market cap may be flat, but payment transaction volume is up 45% year-over-year according to Allium, and as you'll read below, the number of stablecoin-enabled consumer and commercial endpoints keeps growing. Today, you can choose to believe the continued activation of stablecoin payors won't unlock rapid adoption, or you might consider the question of how quickly you are able to respond if it does.

Samsung Built a Bank Account and Called It a Wallet

Samsung said on October 7 that Samsung Wallet will add USDC for eligible U.S. users starting the last week of October, on about 82 million compatible Galaxy devices. Users will be able to send USDC to external wallets and pay out to bank accounts in more than 60 countries in the recipient's local currency. Bastion provides the cross-border payment framework, and Coinbase, as Bastion's sub-custodian, holds the USDC in Coinbase Prime Vault, while the phone's biometrics authorize each transfer. The same day, SAP-backed Tereina and Circle said they will bring USDC and EURC to SAP customers through SAP Pay, starting with SAP Cloud ERP and proof-of-value programs over the coming months. On October 6, federally chartered Anchorage Digital acquired Routable, a payouts platform reaching 220 countries, to sell combined fiat and stablecoin payments to tech platforms and Fortune 500 companies. Sources [Samsung, Circle, PYMNTS]

My Take:

Stablecoins are being wired into consumer and commercial endpoints faster than any other payment method. Three years ago, PayPal launched PYUSD for its U.S. customers. Since then, digital wallet apps, traditional brokerages, and now phone wallets and corporate software have followed. By my rough count, there are already over one billion U.S. endpoints able to send or receive a stablecoin across the landscape of traditional finance, digital wallets, and fintech.

The interesting detail in Samsung's announcement is how it's doing custody. Samsung's USDC lives at Coinbase, not on the phone. The phone and its secure biometrics are just the approval mechanism, so a lost or replaced device is an inconvenience, not a loss of funds. That's a long way from bitcoin's self-custody ethos, but anyone who has dealt with private key management knows that serving the average consumer or business requires it. It puts the large incumbent custodians that specialize in stablecoins in a strong position to win the wallet deployments to come, which is the same logic behind Anchorage, a chartered custodian, buying its way into fiat payouts.

On the commercial side, SAP Pay puts stablecoins inside the ERP that reaches 400,000 customers generating 84% of global commerce, according to SAP. The release doesn't say how funds will move on and off chain, so I assume Circle has worked with SAP to line up on- and off-ramp providers in individual countries. Volume flowing through those providers for SAP customers will benefit the entire stablecoin ecosystem by bringing more liquidity to the fiat-stablecoin interface.

These announcements look less wallet features and more like a bank account without the bank. A Samsung user can hold a dollar balance, send it to anyone with a wallet and pay it out in local currency to bank accounts in more than 60 countries, all from an app that came preinstalled on their phone. That covers much of what a transaction account does, but there is no deposit underneath. Twelve months ago, the big stablecoin launches were about moving coins on-chain. Now they put balances and fiat payouts inside the apps where customers already spend their time. Customers won't think of this as opening an account somewhere else, and that's the risk to the bank.

Coupon Clippings

Two Big Fines, One Warning for Stablecoin Firms

On October 13, Treasury, FinCEN, the OCC and OFAC announced actions against Bank of America, including a $1.2 billion FinCEN penalty, a $750 million OCC penalty and an $11.6 million OFAC settlement, citing a transaction-monitoring system that missed trillions of dollars in flows, more than $5 billion in late-reported suspicious transactions and alerts left uninvestigated more than a year after a 2024 cease-and-desist. Five days earlier, the OCC fined American Express National Bank $350 million, citing about $13 billion in suspected trade-based money laundering identified and reported late over the past decade. These actions should catch the attention of every stablecoin company because they show how even the largest and most sophisticated institutions fall behind on updating their compliance programs, training staff and filing SARs on time. Recent reporting by The Economist suggests stablecoin companies may be lax on compliance. As more of them get trust bank charters and come under federal supervision, they should be held to the same standard, and because most stablecoin flows are cross-border, they are far more exposed than the average large bank. Sources [Treasury, OCC, Economist]

Can Private Companies Seize Your Money?

Cross-border payments firm Conduit sued stablecoin issuer Tether in federal court in Manhattan over $2.76 million of USDT that has been frozen in Conduit's treasury wallet for more than a year. Conduit says the freeze stems from a Brazilian Federal Police investigation into a former customer, that law enforcement never flagged its wallet and that a Brazilian court confirmed Conduit was not under investigation. Conduit is seeking return of funds plus $2.76 million in damages. This is a chilling story because it shows how much latitude an issuer has over its tokens, no matter where they are held: freezing a wallet's balance is like freezing the bills in your wallet. While banks often reserve discretionary freeze rights in their deposit agreements, they have a much narrower view of customer activity compared to a stablecoin issuer which can look at on-chain data. For U.S. on-shore coins, the GENIUS Act requires issuers to be able to freeze tokens to comply with lawful orders, but doesn't expressly prohibit freezes without one. Likewise, the Treasury/FinCEN proposed stablecoin issuer rules, released in April 2026, did not formally prohibit discretionary freezes either. This sets up the possibility for more cases like this one to fully resolve how much latitude a stablecoin issuer can use. [Full Story]

FinCEN Walks Back Two Crypto Proposals

On October 6, FinCEN formally withdrew two pending crypto proposals: a December 2020 rule that would have imposed recordkeeping and reporting requirements on transactions with unhosted wallets, and an October 2023 Section 311 special measure that would have treated convertible virtual currency mixing as a class of transactions of primary money laundering concern. Both would have extended compliance and reporting well beyond the standard set for traditional financial institutions. A bank can only see one hop away, to the counterparty institution, while a virtual asset service provider can see everything onchain. This change reduces VASPs' obligation to police customers' off-platform activity and aligns their role closer to how banks operate, but does not relieve VASPs of the duty to understand their customers' sources and uses of funds. Since mixers exist to create privacy on-chain, VASPs will still be walking a fine line between respecting customer privacy and fulfilling their compliance obligations. Sources [Federal Register, Federal Register]

The FDIC Wants to Know When to Shut the Door

Speaking at DC Fintech Week on October 14, FDIC Chairman Travis Hill said the agency will "have more work to do" on tokenized deposits after its GENIUS Act rulemaking. His central concern is resolution: if money moves around the clock with no decline in volume, it would "make things more challenging in terms of when we shut the door on the institution" over a weekend, though he noted that rail hours are only one reason activity slows on a Friday night. My co-authors and I took up this problem in Banking Stablecoins, noting the challenge of determining asset ownership if the FDIC can't stop tokenized deposits from moving after a cutoff. Tokenized deposits present still more unresolved challenges. Gaps in the state-by-state Uniform Commercial Code framework need to be closed before tokenized deposits can move comfortably between non-bank customers, the step that makes them more useful than a 24x7 accounting tool for the issuing bank. [Full Story]

Thanks for reading. If you don't hear from us for a bit, don't worry—we'll be back when there's something important to share.

Omnia is a provider of stablecoin infrastructure for banks that want to capture growing demand for stablecoins. If you're interested in learning more about us, please get in touch.

Getting value? Forward to a colleague and subscribe.