Banks warn stablecoins could drain trillions from deposits

[madtrader]

Opposition from banks centers on one fear: deposits leaving the traditional financial system. Standard Chartered estimates that if the stablecoin market grows to $2 trillion, developed-market banks could lose up to $500 billion in deposits by 2028, with emerging markets facing losses approaching $1 trillion.

Bank executives argue the risk is structural, not cyclical. Stablecoin reserves are largely held in Treasury bills rather than bank deposits, meaning money that exits the system is unlikely to return. Bank of America’s CEO has warned that as much as $6 trillion in US deposits could eventually migrate to stablecoins.

At the heart of the dispute is whether stablecoin-linked yield should be allowed—an issue now central to both regulatory negotiations and the crypto industry’s growing political clout.

[AIcash]

lol banks freaking out over stablecoins like they’ve never heard of fintech before