How Will Banks Make Money from Stablecoins? 8 Revenue Models

The Stablecoin Opportunity Banks Can't Ignore

Stablecoins processed over $27 trillion in onchain volume in 2024 — more than Visa. Circle has filed to IPO. Stripe acquired Bridge for over $1 billion. Fidelity is building its own stablecoin. The question for banks is no longer whether stablecoins matter, but how to make money from them.

The economics of stablecoins have historically been simple: take in dollars, invest the reserves in T-bills, and keep the yield. That model built Tether into one of the most profitable financial companies in history relative to headcount.

“How did the economics behind stablecoins get distributed? Today, the model is you give them dollars, and they earn interest income that goes back to the issuers.”

— Cuy Sheffield, Head of Crypto at Visa

But the revenue landscape is broader than reserve yield alone. Banks that understand the full opportunity can build multiple revenue streams — many of which play to their existing strengths. Here are eight distinct models.

1. Issuing Their Own Stablecoin

The most direct approach: a bank issues its own dollar-denominated stablecoin, backed by deposits and reserves held on its own balance sheet. This is the model Fidelity is pursuing with FIDD, and the one that JPMorgan pioneered internally with JPM Coin (now Kinexys).

By issuing their own token, banks retain full control over the economics. They earn yield on the reserves, they set the fee structure for minting and redemption, and they own the customer relationship end to end. For large banks with existing deposit bases, this is the most natural entry point.

“Our thesis is fairly simple. We strongly believe that the future of economy will be tokenized, everything from real estate to equity to deposit.”

— Bam Azizi, CEO, Mesh

The competitive advantage is clear: banks already have the regulatory licenses, the compliance infrastructure, and the customer trust required to issue a stablecoin. A crypto-native company has to build all of that from scratch.

2. Reserve Yield Management

Even if a bank doesn't issue its own stablecoin, it can serve as the reserve manager for existing issuers. Stablecoin reserves — typically held in T-bills, money market instruments, and short-duration government securities — need to be managed by institutions with deep expertise in treasury operations.

This is a service banks already provide to corporate treasury clients. The difference is scale: a top-10 stablecoin issuer might hold $5–50 billion in reserves. Managing those assets generates fee income while requiring minimal new infrastructure. Banks with strong fixed-income desks and custodial capabilities are particularly well positioned.

As stablecoin regulation formalizes in the US and Europe, reserve requirements will likely mandate that assets be held with regulated banking institutions — creating a structural tailwind for bank involvement.

3. On/Off-Ramp Services

Every stablecoin begins and ends its life as fiat. Someone deposits dollars to mint USDC. Someone else redeems USDC for dollars. The institutions that facilitate these conversions earn fees on every transaction.

Banks with established payment rails — ACH, wire transfer, SWIFT — are the natural infrastructure providers for fiat-to-stablecoin conversion. They can offer this as a B2B service to fintechs, exchanges, and payment companies that need reliable, compliant on/off-ramp access.

The fee structures vary, but even thin margins at high volume generate meaningful revenue. As stablecoin usage grows in cross-border payments, remittances, and B2B settlement, the volume flowing through on/off-ramps will grow proportionally.

4. FX and OTC Trading

Stablecoins are rapidly becoming the settlement layer for foreign exchange. Instead of routing a dollar-to-peso payment through correspondent banks over two to three days, companies are increasingly converting to USDC, sending it instantly, and converting to local currency on the other end.

Banks with FX desks can offer stablecoin-denominated trading pairs — providing liquidity and earning the spread. Zodia Markets, a subsidiary of Standard Chartered, is already demonstrating this model at institutional scale.

“We are an institutional match principal broker. We offer execution services in digital assets against fiat currencies. We offer 21 currency pairs against stablecoins, particularly in emerging market currencies with tight spreads.”

— Nick Philpott, Co-founder, Zodia Markets (Standard Chartered subsidiary)

The opportunity is especially compelling in emerging market corridors where traditional correspondent banking is slow and expensive. A bank offering tight stablecoin-to-local-currency spreads in markets like Nigeria, Brazil, or the Philippines is solving a real pain point for businesses and generating trading revenue in the process.

5. Custody and Safekeeping Services

Institutional holders of stablecoins — corporates, funds, fintechs — need qualified custodians. Banks already have custody infrastructure, insurance coverage, and the regulatory standing that institutional clients require.

Custodying digital assets, including stablecoins, is a natural extension of existing services. The fee model mirrors traditional custody: basis points on assets under custody, with additional fees for transaction processing, reporting, and compliance services.

As tokenized money market funds, tokenized treasuries, and stablecoins converge, the custody requirements become more complex — and more valuable. Banks that invest in digital asset custody infrastructure now will be positioned to capture this growing market.

6. Settlement Infrastructure

One of the clearest value propositions of stablecoins is faster, cheaper settlement. Banks can use stablecoins to settle transactions between institutional counterparties in minutes rather than days — reducing capital requirements, lowering operational risk, and freeing up liquidity.

This is the model JPMorgan built with Kinexys (formerly Onyx), processing over $1 billion in daily volume for institutional clients. The bank charges for access to the network and for the settlement services, generating fee income while also reducing its own operational costs.

For banks with large corporate and institutional client bases, offering stablecoin-based settlement as a premium service creates a new fee line while simultaneously making the existing business more efficient.

7. Compliance-as-a-Service

Stablecoin issuers need robust KYC/AML infrastructure. Under emerging regulations like MiCA in Europe and the proposed stablecoin frameworks in the US, issuers must maintain rigorous compliance programs — many of which mirror what banks already do.

Banks can package their compliance capabilities as a service: onboarding verification for stablecoin minting, transaction monitoring for suspicious activity, sanctions screening for wallet addresses, and regulatory reporting.

“The worst case scenario is they cut out some middlemen and they get to keep more of the revenue.”

— Sam Broner, Partner, a16z Crypto

The inverse is also true: if banks don't offer compliance services to the stablecoin ecosystem, crypto-native companies will build their own — and potentially cut banks out of the value chain entirely.

8. White-Label Issuance

Not every company that wants a stablecoin needs to build one from scratch. White-label issuance — where a bank provides the regulatory framework, reserve management, and token infrastructure for another company's branded stablecoin — is an emerging revenue model.

Think of it like banking-as-a-service for stablecoins. A large retailer, a payment network, or a fintech wants to offer a dollar-denominated stablecoin to its users. Rather than obtaining its own e-money license and building reserve management from scratch, it partners with a bank that provides the infrastructure behind the scenes.

The bank earns fees on issuance, redemption, reserve management, and ongoing compliance — while the partner company owns the customer-facing brand. This model scales efficiently because the underlying infrastructure is reusable across multiple partners.

Why Banks Have Natural Advantages

Banks are not starting from zero. They have several structural advantages over crypto-native companies when it comes to stablecoins:

• Regulatory licenses — Banking charters, e-money licenses, and broker-dealer registrations are expensive and time-consuming to obtain. Banks already have them.
• Customer trust — After the collapses of FTX, Celsius, and other crypto platforms, institutional and retail customers increasingly prefer regulated counterparties.
• Existing payment rails — Banks are already connected to ACH, SWIFT, Fedwire, and domestic payment systems globally. Stablecoin on/off-ramps require exactly these connections.
• Balance sheet capacity — Issuing a stablecoin or managing reserves requires significant balance sheet strength. Banks have it; most startups don't.
• Compliance infrastructure — KYC/AML programs, sanctions screening, transaction monitoring — banks have spent decades building these capabilities.

The Competitive Threat If Banks Don't Act

The risk of inaction is not that banks miss a revenue opportunity. It is that stablecoins route around them entirely.

Circle and Stripe are building payment infrastructure that competes directly with correspondent banking. Crypto-native firms are obtaining their own banking and e-money licenses. Layer 2 networks from companies like Coinbase (Base) and Stripe are creating settlement infrastructure that doesn't require bank intermediation.

If a company can move dollars globally using stablecoins without ever touching a traditional bank, the bank loses not just the stablecoin opportunity — it loses the underlying payments, FX, and custody revenue it currently earns.

The institutions that recognize this early and build stablecoin capabilities across multiple revenue models will strengthen their position. Those that wait risk becoming infrastructure that others build on top of — earning thin margins on commodity services while the value accrues elsewhere.

The Bottom Line

Stablecoins are not a single product. They are a new infrastructure layer that creates at least eight distinct revenue opportunities for banks: issuance, reserve management, on/off-ramps, FX trading, custody, settlement, compliance services, and white-label issuance.

The banks that will capture the most value are those that pursue multiple revenue models simultaneously, leveraging their existing advantages in regulation, trust, and infrastructure. The ones that treat stablecoins as someone else's problem will find that stablecoins have become everyone's business — including their competitors'.

The window for strategic positioning is open now. It will not stay open indefinitely.