Narrow banking can also be described as a continuation of the "unbundling" of the banking system. With the rise of stablecoin, we will continue to see the trend of assets and liabilities moving out of banks into non-banks.
According to the U.S. Department of Treasury Digital Money study from April 2025, $6.6T of deposit liabilities are "at risk" to move from the checking and savings accounts into stablecoin, with $2T of that by 2028.
Enter tokenization, which turns real world assets (such as consumer or business loans) into on-chain assets, providing yield to financial institutions to help mitigate the coming gap.
What you'll learn:
- The implications of stablecoin growth on monetary supply
- Potential banking system ramifications with the increase in stablecoin trading
- How decentralized finance (DeFi) and blockchain via tokenization offer a natural solution
Every dollar that moves into stablecoin is a dollar that was once held in a bank transaction account funding loans. The tokenization of real-world assets (RWAs) provides a glance into an evolving financial system, reshaping lending, liquidity, and the role of blockchain in global finance.