Summary: The stablecoin conversation in credit union circles tends to fixate on one question: will members move their deposits? It’s a reasonable thing to worry about, but Filene Research Institute’s recent piece, co-authored by Dr. Lamont Black and Dr. Henry Kim, surfaces a risk that’s both more immediate and less discussed. Deposits and payments revenue are linked. If member transaction flow shifts toward stablecoin-based payments, interchange takes a hit well before balances move in any meaningful way. For credit unions that have grown increasingly dependent on non-interest income over the past decade, that’s the number worth watching.
The Deposit Question Is Real. It’s Also Incomplete.
Filene published a pointed, honest piece on stablecoins earlier this year, structured as a debate between two researchers who don’t entirely agree with each other, which makes it more useful than most takes on this topic. Dr. Lamont Black and Dr. Henry Kim work through five questions credit union boards should be having now. Read it here: Stablecoins and Credit Unions: Five Strategic Questions Leaders Should Be Debating Now.
On deposit leakage specifically, both researchers land in roughly the same place: the risk is real but conditional. Stablecoins under the current regulatory framework can’t pay straightforward yield to holders, which removes one of the more obvious reasons a member would park a balance in a stablecoin wallet instead of an insured deposit account. If stablecoins stay primarily a back-end settlement tool, the direct impact on consumer balances may be limited. If they become embedded in the wallets and platforms members already use daily, some behavioral shift is probably inevitable even without a yield incentive.
That’s a reasonable place to land. But Dr. Black adds a point that doesn’t get enough traction in most stablecoin discussions, and it’s the one worth sitting with.
Deposits and Payments Revenue Are Two Different Lines
The assumption most institutions carry into this conversation is that the primary stablecoin risk is where members store value. Dr. Black’s argument is that how members move money matters just as much, and potentially sooner. If more transactions shift from card-based payments to stablecoin-based payment flows, even gradually and even without any conscious member decision to “switch,” interchange revenue declines before deposit balances move at all.
That’s not a hypothetical risk sitting five years out. Interchange income as a share of non-interest revenue has grown steadily across the credit union industry over the past decade, and for a lot of institutions it’s now a meaningful line. A behavioral shift in how members transact, running through PayPal, Venmo, or any other platform where stablecoin payments are available, hits that number first. It shows up in transaction volume data and interchange trends before it registers anywhere near the balance sheet.
The credit unions most exposed to this aren’t necessarily the largest ones or the ones with the most fintech-forward membership. They’re the ones that have come to depend most heavily on interchange as a revenue source and haven’t yet mapped what a partial shift in member payment behavior would do to that number.
What To Do With This
Neither Filene nor Wide Open Ventures is arguing that credit unions need a stablecoin program. What both are arguing is that the strategic conversation needs to be broader than the deposit question. Understanding your institution’s interchange exposure, knowing which stablecoin instruments are already in market and how they’re distributed, and having a leadership team that’s thought through both dimensions is a reasonable baseline for any institution that takes its payments strategy seriously.
Frequently Asked Questions About Stablecoins and Credit Union Revenue
Why would stablecoins affect interchange revenue before deposit balances?
Because payments behavior changes before savings behavior does. A member might start using a stablecoin-enabled wallet for everyday purchases while keeping their primary deposit account exactly where it is. The credit union loses the transaction flow and the associated interchange income without losing the member relationship on paper.
Are stablecoins actually being used for consumer payments today?
At scale through PYUSD across PayPal and Venmo’s combined user base, yes. The volume is still small relative to total card transaction volume, but the distribution infrastructure is already in place. Growth from here is a question of consumer behavior and platform incentives, not infrastructure readiness.
Should our credit union be doing something about this now?
Not necessarily in a product sense. But having a leadership team that understands the exposure, knows the instruments in market, and has a shared framework for evaluating how stablecoins could touch your payments revenue and deposit base is a reasonable near-term goal. That’s a knowledge and governance question, and it’s one that’s much easier to address before the pressure arrives than during it.
What is the Wide Open Ventures Stablecoin Cohort?
A structured, virtual program for credit union executives covering stablecoins, payments infrastructure, regulatory considerations, and institutional governance. Built for leaders who need practical grounding rather than a general introduction to crypto.
We’ve extended the registration window for fall cohort two through September 4th.
