Stablecoins have moved quickly from crypto exchanges into mainstream finance, but the Bank of England is warning that demand may not be as permanent as the industry assumes.
Megan Greene has put a colder question in front of the stablecoin market: what if the current surge is not the beginning of a new payments order, but a phase that fades once regulation, interest rates and better banking infrastructure catch up?
That is not the kind of message fintech founders want to hear right now. SoFi has just pushed its dollar-backed SoFiUSD stablecoin onto Ethereum and Solana for retail users. Cash App began rolling out USDC support on Solana, Ethereum, Polygon and Arbitrum to its 59 million monthly transacting customers. In Washington, crypto market structure legislation continues to move through Congress after the House passed the CLARITY Act last year and Senate committees advanced related work this month.
According to Reuters, Greene, an external member of the Bank of England's Monetary Policy Committee, said on Sunday that demand for stablecoins may prove transitory. The timing matters. Her comments arrived just as the market narrative has shifted from speculation to payment rails, with banks, consumer apps and remittance companies treating stablecoins as practical infrastructure rather than a niche crypto product.
Stablecoins have earned their place because they solve a real problem. They move dollars around the clock, settle quickly, and can plug into public blockchain networks without waiting for banking hours. That is useful for crypto trading, but it is also useful for cross-border payments, merchant settlement, treasury operations and consumer transfers.
Cash App's move is a good example. The company is not presenting USDC as a speculative asset. It is positioning the token as a way to deposit and withdraw value from external wallets into a Cash App balance. The company says stablecoin transaction volume over the last 12 months reached $13.28 trillion, a figure that shows why payment companies are paying attention even if much of that activity still comes from crypto-native flows.
SoFi's push is more striking because it comes from a nationally chartered bank. SoFiUSD is redeemable one-for-one for dollars and is available on Ethereum and Solana. For a bank with nearly 15 million members, the product is a test of whether stablecoins can sit inside ordinary financial apps without asking users to behave like crypto traders.
But Greene's point cuts through the excitement. Early demand can be inflated by novelty, incentives, trading use cases and the appeal of faster rails. That does not automatically mean households and businesses will hold stablecoins in size once banks offer comparable settlement speed or once regulators impose the kind of guardrails that make the product less flexible.
Central banks are watching the money layer
The Bank of England has not treated this as a sideshow. It is working through a proposed regime for sterling-denominated systemic stablecoins and has said it expects to publish more detail on its supervisory approach in 2026. It is also still in the design phase for a potential digital pound, with the Bank and HM Treasury expected to decide on next steps this year.
That explains the institutional caution. A stablecoin used at scale is not just another app feature. It can affect deposits, credit creation, payment resilience and monetary transmission. If people and companies move money out of bank deposits and into private tokens, banks may lose a cheap and stable source of funding. If stablecoin issuers become critical payment infrastructure, central banks inherit a new set of stability risks without directly controlling the network.
The European Central Bank has taken a similarly wary tone. Christine Lagarde warned this month that Europe should not simply copy the U.S. approach to stablecoin regulation, especially when the market is overwhelmingly dollar-denominated. That is the bigger worry for central banks outside the United States: private dollar tokens could strengthen dollar payment rails at the expense of domestic monetary systems.
For fintech companies, the message is not to stop building. It is to build with a more sober view of demand. A stablecoin feature may attract attention today, but the long-term business case depends on whether customers use it repeatedly for payments, settlement and transfers after the initial launch period passes.
This is where the startup lesson becomes practical. Infrastructure decisions made in 2026 will be expensive to unwind. A company integrating stablecoins has to think about compliance, network support, custody, fraud controls, user education and liquidity. If demand later concentrates around a small number of regulated issuers or bank-operated tokenized deposits, some early integrations may look less strategic than they do now.
Still, Greene's warning should not be mistaken for a dismissal. Stablecoins have already shown that users want faster and more open money movement. The open question is whether private tokens become the lasting answer, or whether they push banks and central banks to modernize enough that the original demand weakens.
The next signal to watch is not another flashy launch. It is usage after the launch. If SoFi members and Cash App users keep moving money through stablecoin rails after the novelty fades, the market will have stronger evidence that demand is durable. If activity falls back to crypto traders and cross-border specialists, Greene's warning will look less like skepticism and more like early discipline.
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