De-Risking Didn't Eliminate Financial Risk. It Pushed It Elsewhere.

On October 13, the U.S. Treasury announced more than $1.21 billion in penalties against Bank of America for anti-money-laundering and sanctions compliance failures. Among its findings, the bank had failed to report more than $5 billion in suspicious transactions on time. The case shows the enormous consequences that come when oversight falls short, and how hard compliance is to calibrate. Banks aren't expected to stop every illicit transaction, but every bank is expected to make a credible, risk-based effort to find them. Faced with that standard, much of the industry has chosen to avoid whole categories of customers rather than evaluate their individual risks, and that choice has created problems of its own.

For years, banks have practiced de-risking: withdrawing from entire industries, geographies and customer categories when the cost of compliance outweighs the business opportunity. Legitimate companies get caught in the exits, often because their sector or location is considered too difficult to serve. Yet closing an account doesn't eliminate the underlying demand for financial services. Payments keep moving, sometimes through channels with far less oversight. The Financial Action Task Force has warned that indiscriminate de-risking can push financial activity into less regulated channels, where transactions are less reliable with weaker consumer protections.

Stablecoins offer an increasingly important alternative, both for businesses that have been shut out of banking and for those that are well served by it. A small exporter waiting days for an international payment and a multinational managing liquidity across markets face versions of the same problem: moving money internationally remains too slow, expensive and dependent on banking hours. Stablecoin infrastructure can address those inefficiencies by enabling faster, round-the-clock settlement.

The shift is evident in who's adopting the technology. In September, SoFi Bank became the first national bank to go live with stablecoin settlement on Mastercard's network, moving its $25 billion card program to settlement in SoFiUSD, a stablecoin the bank issues itself. Lloyds Banking Group completed a live stablecoin settlement pilot with Visa, moving $750,000 in settlement funds in under an hour, including over a weekend. Infrastructure that offered businesses an alternative to conventional payment channels is increasingly being incorporated into the regulated financial system itself.

But bringing these flows into the mainstream will only work if compliance keeps pace. Faster settlement doesn't make a transaction legitimate, and blockchain transparency doesn't establish who controls the money or why it's moving. In March, FATF warned about the misuse of stablecoins, particularly through transactions involving unhosted wallets. Speed is no excuse for lighter oversight. Money that settles in minutes, at any hour, leaves less time to catch a problem, which raises the bar for real-time monitoring.

The opportunity is to replace blanket exclusions with more precise risk management. Digital identity verification, sanctions screening, continuous monitoring and transaction-level analysis can help institutions distinguish legitimate activity from genuine threats. Instead of turning away an entire industry or region, providers can assess individual customers, monitor how funds move and intervene when suspicious patterns emerge. This doesn't eliminate risk or the need to reject certain customers. It makes those decisions more informed and defensible.

Fintechs have already seen the consequences of intermediaries neglecting basic responsibilities. The collapse of Synapse, which left consumers unable to access funds and exposed an estimated $85 million shortfall between customer balances and bank records, was a failure of recordkeeping and reconciliation. The lesson applies across financial infrastructure, stablecoins included: sophisticated software is no substitute for rigorous controls. Providers must know their customers, maintain accurate records and take responsibility for the transactions they facilitate.

The strongest case for stablecoin infrastructure isn't that it allows businesses to escape the banking system. It's that it can make financial services faster, more accessible and easier to monitor within a properly regulated framework. Banks should no longer have to choose between excluding legitimate customers and taking risks they cannot effectively manage.

De-risking pushed financial activity away from institutions equipped to oversee it. Better infrastructure gives those institutions a chance to bring it back, provided the companies building that infrastructure are willing to do the diligence. Financial security should depend on understanding the risk of a customer and a transaction, not simply refusing to serve them.

About Zach Walsh

Zach Walsh is the co-founder and CEO of HIFI, a financial technology company building infrastructure for programmable global money. In September 2026, HIFI announced a $37 million Series A funding round led by Left Lane Capital to expand its stablecoin payments and tokenized capital markets infrastructure. Before founding HIFI, Walsh held roles at Sony and Uber and helped scale the financial technology company Quadpay prior to its acquisition. His experience working across technology, payments and financial products led him to recognize the need for infrastructure connecting stablecoins with traditional financial rails. At HIFI, Walsh is focused on making money movement faster, more programmable and globally accessible.