The trend: Deposits are moving out of community financial institutions (FIs) and into crypto exchanges—from 1% per month 18 months ago to 5% today, per PYMNTS. Instead of chasing these funds by trying to become more like crypto apps, community FIs are increasingly offering stablecoin products.

The accounts: The key for community FIs will be to make stablecoins feel like ordinary banking products—or something for which customers can go to their local FI. Examples of such products include: 

• Deposit accounts: Members can hold their money in credit union–issued stablecoins, just like in a checking or savings account.
• Loan collateral: Stablecoins could be pledged as collateral in lending, integrated into the credit union’s core system so staff and auditors recognize it like any other asset. Remember: We’ve recommended offering this to appeal to younger loan customers in particular.
• Payment accounts: Members could use stablecoins for payments, remittances, and transfers—faster, cheaper rails that feel the same as existing payment services.

Our take: Smaller FIs must not lose sight of what makes them stand out: human centricity, local knowledge, and customer service. By incorporating new technologies and digital currencies into their everyday offerings—instead of reinventing themselves—FIs can remain grounded in those differentiators while still potentially appealing to digital-first demographics.