{"id":2921,"date":"2025-06-23T08:00:41","date_gmt":"2025-06-23T08:00:41","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/evansfamilywealth\/?p=2921"},"modified":"2025-06-19T19:30:25","modified_gmt":"2025-06-19T19:30:25","slug":"stablecoins-vs-canadian-banks","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/evansfamilywealth\/stablecoins-vs-canadian-banks\/","title":{"rendered":"Good News! The Stable-Coin Disruption Coming for Canadian Banks"},"content":{"rendered":"

\"Banker<\/p>\n

The Banker and the\u00a0Snowboarder<\/p>\n

A Tale of Two Giants: Royal Bank and Shopify<\/span><\/h2>\n

Royal Bank of Canada\u00a0has been around since 1864 and still tops the TSX at roughly $246 billion in market value. Shopify, founded just 19 years ago in 2006, is now Canada\u2019s second-largest public company, valued at $188 billion.<\/p>\n

What Shopify\u2019s Stable-Coin Move Means<\/span><\/h2>\n

Last week, Shopify showed why. The Ottawa e-commerce giant switched on\u00a0USDC stable-coin checkout through partnerships with Coinbase and Stripe, promising near-instant settlement for merchants and \u201cborderless\u201d payments for shoppers. In plain English: your favourite Shopify store can now accept a digital dollar that moves 24\/7 for a few pennies\u2014<\/em>bypassing the card networks that for decades have funneled lucrative fees to Visa, Mastercard and the Canadian banks that issue those cards. Reports that Walmart and Amazon were also considering the move precipitated a 5% drop in Visa and Mastercard.<\/p>\n

\"Genius<\/p>\n

Regulatory Green Light: The GENIUS Act<\/span><\/h2>\n

Late Tuesday, the U.S. Senate passed the\u00a0GENIUS Act, the first federal law that gives stable coins an official regulatory home. Treasury Secretary Scott Bessent called the opportunity \u201ca potential US $3.7 trillion market by 2030.\u201d With Washington planting the flag, every global payments player (from Amazon to RBC) has to decide whether to ride the new rail or risk watching volumes leak away.<\/p>\n

Three Pressures on Canadian Bank Profits<\/span><\/h2>\n
    \n
  1. Swipe-fee compression: <\/strong>Canadian merchants pay roughly $2 billion a year in credit-card fees. Stable-coin rails could shave fees by a third, starting with big retailers that have negotiating muscle. If just 15% of card volume migrates, the Big Six could lose $1 billion in high-margin revenue within five years\u2014<\/em>about 6% of 2024 net profit for the group.<\/li>\n
  2. Deposit drift: <\/strong>A regulated, interest-bearing digital dollar may tempt households to park cash in a wallet rather than a chequing account. A 3% deposit outflow would slice roughly $9 billion from RBC\u2019s ultra-cheap funding base, denting earnings by an estimated $180 million a year.<\/li>\n
  3. Rewards spiral: <\/strong>Rich credit-card perks are funded by those swipe fees. As fees fall, expect banks to trim points and cashback. That, in turn, erodes the very loyalty that keeps Canadians reaching for plastic.<\/li>\n
  4. Tech-spend catch-up: <\/strong>JPMorgan* already clears billions a day on its private blockchain. PayPal launched PYUSD last year. Canadian banks will need to invest heavily to issue (or at least integrate) CAD-backed stable coins. That\u2019s a new line-item many investors haven\u2019t modelled.<\/li>\n<\/ol>\n

    Why Bank Stocks Still Matter<\/span><\/h2>\n

    Canada\u2019s banks aren\u2019t about to disappear. They boast fortress capital ratios, diversified businesses and regulatory protection. But the ground is shifting. A reasonable scenario is \u201csame banks, lower profits.\u201d<\/p>\n

    Our Take as Top Ottawa Investment Advisors<\/span><\/h2>\n

    Potential beneficiaries (stocks to watch):<\/p>\n