TRM Labs’ Banking on Stablecoins white paper highlights how banks are increasingly engaging with fiat-backed stablecoins to streamline payments and remain competitive as regulation evolves. The passage of the U.S. GENIUS Act has accelerated clarity, encouraging traditional institutions to participate in issuance, integration and settlement. While stablecoins promise faster, programmable payments for retail and B2B use, they also introduce non-traditional risks that financial institutions must manage across compliance, cybersecurity, liquidity and operational dimensions. A well-functioning mitigation framework must be centered on people, processes and technology: from dedicated crypto-compliance officers, legal counsel and blockchain-savvy auditors to robust AML/KYC programs, sanctions screening, Travel Rule compliance and consumer protection disclosures. Cybersecurity safeguards (e.g. hardened wallet systems, incident response protocols, penetration testing, key recovery) are equally critical. Institutions must also invest in blockchain intelligence, automated monitoring and integrated case management tools to detect illicit activity and maintain resilience. With strong governance, banks can leverage stablecoins as secure, scalable payment rails while also meeting regulatory expectations.
