Onigiri Weekend Digest: Institutional Lens #29

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Good weekend from Onigiri Capital.

This week’s two headlines is about validation through resistance. When Jamie Dimon warns that tokenization and stablecoins are beginning to threaten core banking functions, he is effectively confirming that this market has moved beyond crypto experimentation and into direct competition with financial incumbents. And when projections suggest stablecoins could scale toward $1.5 quadrillion in transaction volume by 2035, the question is no longer whether this infrastructure matters, but how quickly it becomes embedded into the global financial system.

Recap this Week's Headliners

SS #89 - Dimon Warns Tokenization, Stablecoins Threaten Banking 

SS #90 - Stablecoins Could Hit $1.5Q by 2035

Put together, these two headlines show the same reality from different angles: stablecoins are growing large enough that incumbents can no longer dismiss them, yet still early enough that control over the rails is very much up for grabs.

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🍙 Onigiri Take

The market should stop treating stablecoins as a crypto vertical and start treating them as a competitive rewrite of financial intermediation. Dimon’s warning matters not because JPMorgan “discovered” blockchain risk, but because the largest deposit-funded bank in the world is now publicly admitting that blockchain-based money movement can compress settlement time, reduce friction, and threaten traditional bank economics. JPMorgan’s own response, through Kinexys and JPM Coin, shows that the incumbents no longer view onchain rails as optional experimentation. They view them as defensive infrastructure.

At the same time, the Chainalysis projection should not be read as a literal forecast that $1.5 quadrillion is inevitable. It is better understood as a framing device for the ceiling of adoption if two conditions hold: first, stablecoins continue converting real economic activity rather than mostly trading activity; second, distribution gets embedded into mainstream payment surfaces. The more important number is the current base: Chainalysis says stablecoins processed $28 trillion in real economic volume in 2025 after stripping out noise, which means the category is already large enough to influence strategy at banks, card networks, fintechs, and regulators.

Our view is that the next phase of competition will not be about who “believes” in stablecoins. It will be about who owns the customer interface, compliance perimeter, reserve economics, and settlement orchestration when money becomes internet-native. Stripe completing its Bridge acquisition, Bridge receiving conditional OCC approval for a trust bank, and Mastercard agreeing to acquire BVNK are all signs that major payments players are moving from observation to infrastructure capture.

🍙 Winners & Losers: Institutional Outlook

🍙 Under the Hood: From Deposit Moats to Network Moats

Dimon’s warning is really about the erosion of the banking bundle. Traditional banks historically controlled deposits, payments, lending, and settlement inside one regulated stack. Stablecoins break that bundle apart. A user can store value in a token, settle globally around the clock, and plug that money into software or markets without waiting for bank hours or correspondent networks. Once that happens, the moat is no longer the branch, the balance sheet, or even the payment license alone. The moat becomes distribution, trust, interoperability, and regulatory position.

JPMorgan’s own posture confirms this. Kinexys is explicitly presented as a bank-led blockchain alternative for institutional cash settlement, and JPM Coin functions as a blockchain-based deposit token for real-time institutional transfers. In other words, even the incumbent response is not to deny the model, but to recreate it within the banking perimeter. That is the strongest proof that stablecoins and tokenized cash are becoming baseline financial infrastructure.

The Chainalysis thesis adds the second layer: scale. Its argument is not just that stablecoins are growing, but that once adjusted for genuine economic activity, they are already meaningful enough to rival legacy networks over time. The report links that upside to two accelerants: the generational wealth transfer to more crypto-native cohorts and point-of-sale saturation that makes stablecoin usage invisible to the end user. That is strategically important because financial infrastructure usually becomes dominant when the user stops noticing it.

Meanwhile, the corporate response is already visible. Stripe completed Bridge, then Bridge won conditional approval to establish a national trust bank. Mastercard went further and agreed to acquire BVNK to connect onchain payments with fiat rails. These are not marketing experiments. They are balance-sheet and M&A decisions that suggest the market increasingly views stablecoin infrastructure as core payments infrastructure.

A useful nuance is that regulation is no longer just a gating factor. It is now a competitive filter. The U.S. framework has moved into rulemaking and implementation, while White House economists argued that banning stablecoin yield would do little to protect bank lending relative to the cost to consumers. That weakens one of the banking lobby’s simpler arguments against stablecoin utility, even as central bankers elsewhere, such as the ECB, continue warning about monetary sovereignty and deposit displacement.

So the future trend is becoming clearer. We are likely heading toward a layered market structure: bank-issued tokenized deposits for regulated institutional use, private stablecoins for broad internet and cross-border commerce, and tokenized assets settling against both. The winners will be the platforms that can move between these layers cleanly, compliantly, and globally.

🍙Stablecoin ≠ Crypto — It Is the New Interface for Dollar Distribution

The biggest mistake incumbents still make is to treat stablecoins as a subset of crypto trading. That frame is already outdated. Stablecoins are increasingly a distribution model for dollars, a settlement format for assets, and an application layer for payments. The economic battle is not over token ideology. It is over who gets to intermediate digital dollars once they can travel globally, settle instantly, and plug directly into software.

That is why banks feel threatened, card networks are acquiring infrastructure, and regulators are treating the category more seriously. The strategic issue is not whether stablecoins replace every bank deposit. It is whether the highest-value payment, treasury, and market flows begin to migrate to a new interface where the old gatekeepers no longer own default distribution.

From an institutional standpoint, stablecoins are best viewed as programmable dollar logistics. Once framed this way, the market opportunity expands far beyond crypto users into remittances, B2B settlement, capital markets, collateral mobility, and tokenized treasury workflows. That is the real reason the category matters.

🍙 Institutional Risks & Unknowns

Despite the progress, several open questions remain:

1. The volume story may be directionally right but numerically overstretched. The $1.5 quadrillion figure is explicitly a catalyst-driven upper bound, not a base case. Investors should focus less on the headline ceiling and more on what adoption quality looks like: merchant acceptance, treasury workflows, reserve transparency, and repeat enterprise usage.

2. Deposit displacement remains unresolved. White House economists found limited lending impact from a yield prohibition, but the ECB and private-sector bank analysts still warn that stablecoin growth can weaken bank funding structures and monetary transmission, especially outside the U.S. This suggests the regulatory outcome will vary by jurisdiction and by currency bloc.

3. Not all “institutional stablecoin adoption” is equal. A bank-controlled tokenized deposit system is economically and politically different from an open, globally portable stablecoin. Some incumbents may embrace tokenization only insofar as it preserves existing gatekeeping. That means institutional participation does not automatically imply open market access. This is an inference supported by how firms like JPMorgan position Kinexys as a bank-led alternative.

4. Reserve concentration and policy dependence matter. If stablecoins become major holders of short-dated Treasuries, they become more intertwined with state policy, banking politics, and market-structure rules. That increases systemic relevance but may reduce the sector’s operational flexibility over time. The U.S. rulemaking timeline reinforces that stablecoins are moving closer to core financial regulation, not further away from it.

Onigiri Capital (onigiri.vc), a US$50 million blockchain-focused investment fund, launched by Saison Capital, the venture arm of Japan’s Credit Saison. Onigiri Capital is on a mission to chart the next chapter of finance and invest in seed and Series A blockchain startups in stablecoins, payments, RWAs, DeFi and financial infrastructure. The fund’s strategy emphasizes connecting startups to Asia’s growing digital asset markets.

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