Asia’s Banks Turn to Stablecoins USDC and USDT to Curb Deposit Flight and Boost Cross-Border Finance
By Sam Reynolds, CoinDesk Asia
Published June 27, 2025
As Asia’s financial institutions face increasing pressure from shifting customer behaviors and evolving global finance dynamics, many leading banks across the region are adopting stablecoins such as USDC and USDT to prevent deposit flight and optimize cross-border transactions. This strategic move signals a quiet but significant transformation in Asia’s banking infrastructure.
Stablecoins as a Defensive Financial Tool
While stablecoins—cryptocurrencies pegged to fiat currencies—made headlines last month in the United States amid legislative scrutiny and notable IPOs, Asia’s approach has been more subdued yet highly strategic. According to Amy Zhang, Head of Asia at digital asset security platform Fireblocks, major banks in Korea, Japan, and Hong Kong are actively exploring or piloting stablecoins pegged to local currencies as a way to prevent customers from moving deposits into stablecoins issued by international providers and to safeguard transaction revenue.
“If I’m not one of the banks banking Circle or banking Tether, am I going to lose deposits? That’s a huge risk for banks,” Zhang explained in a recent interview with CoinDesk.
Regional Bank Consortiums and Pilots
In South Korea, a consortium of eight major banks—including KB Kookmin and Shinhan—is collaborating to develop a Korean won stablecoin, targeting a launch by 2026. This is seen as a direct response to the growing use of USDT and USDC to facilitate cross-border payments, which has seen rapid adoption locally.
Similarly, Japan’s largest financial institutions, including Mitsubishi UFJ Financial Group (MUFG), Sumitomo Mitsui Banking Corporation (SMBC), and Mizuho, are piloting yen-pegged stablecoins. The aim is to streamline trade finance processes, reduce reliance on traditional cross-border payment systems, and improve efficiency.
Hong Kong’s Bank of East Asia has also advanced its efforts with pilot programs involving USD and HKD stablecoin settlement networks. These initiates are part of a broader push to strengthen the city’s position as a leading crypto and finance hub amidst rising global competition.
Payment Service Providers Accelerate Adoption
Beyond banks, payment service providers (PSPs) are fueling stablecoin adoption by shifting away from traditional, often costly and slow banking channels. Zhang noted that a year ago, PSPs were considering whether to adopt stablecoins; now, many are demanding more robust stablecoin infrastructure to handle millions of client flows efficiently.
Fireblocks—which processed over $3 trillion in digital asset transactions last year—reports that stablecoins currently represent roughly half of its transaction volume, reflecting their expanding role in daily commerce.
For instance, major Asian e-commerce platforms, such as China’s JD.com, have reportedly expressed plans to utilize stablecoins to significantly reduce supplier-payment costs. Hong Kong-based PSP Tazapay uses Circle’s USDC to facilitate quick, efficient payouts in USD and HKD to content creators and gamers in emerging Asian markets.
Visa Analytics data also highlights stablecoin usage in retail and gig economy sectors, showing transaction volumes spike by approximately 30% over weekends.
USDT and USDC – Different Dominance by Market
Tether’s USDT remains dominant in emerging Asian markets due to its liquidity and ease of access, while USDC is gaining footholds in well-regulated financial centers like Singapore and Hong Kong. This divergence highlights how stablecoins enable diversified financial strategies tailored to different regulatory and economic environments.
Bakkt Seeks $1 Billion to Boost Bitcoin Holdings Amid Strategic Shift
Separately, in related crypto market news, Bakkt Holdings (NYSE: BKKT) announced plans to raise $1 billion through various financial instruments, including common stock, preferred stock, debt, and warrants, with the intention to invest proceeds into Bitcoin (BTC).
The move aligns Bakkt with a growing cohort of public companies increasingly allocating capital to BTC as a treasury asset amid surging institutional interest worldwide. However, Bakkt faces challenges after recently losing two significant clients—Bank of America and Webull—who contributed substantially to its loyalty and crypto service revenues.
The company is reportedly considering selling or winding down parts of its loyalty business to realign focus on crypto payments and trading infrastructure.
Market Snapshot
- Bitcoin (BTC) held steady above $107,000 with minimal price movement ahead of a $40 billion options expiry.
- Ethereum (ETH) traded near $2,420, with analysts eyeing a breakout that could propel prices toward the $2,800–$4,000 range.
- Gold prices dipped amid mixed macroeconomic signals.
- Asia-Pacific markets showed optimism, with indices like the Nikkei poised to rise following positive Wall Street momentum.
- The S&P 500 rose 0.8%, approaching record highs, supported by easing tariff concerns and economic optimism.
Looking Ahead
Asia’s steady adoption of stablecoins by banks and payment providers marks a significant shift in the region’s financial landscape—one that could redefine cross-border finance and payment systems. The evolution underscores the growing importance of digital assets as practical solutions to traditional banking challenges.
Meanwhile, with Bakkt’s bid to expand its Bitcoin treasury, corporate crypto strategies continue gaining ground, reinforcing the maturation and increasing institutional embrace of digital currencies.
Stay tuned to CoinDesk for continuing coverage of Asia’s crypto revolution and global market developments.
Disclaimer: This article incorporates AI-generated content and has been reviewed by CoinDesk’s editorial team to ensure accuracy and compliance with our editorial standards.
About the Author:
Sam Reynolds is a senior reporter based in Asia with expertise in crypto markets and financial technology. He has been part of award-winning coverage of major industry developments, including the FTX collapse.