Why Stablecoins May Not Threaten Bank Deposits

[etfs]

One major claim Malekan challenges is that stablecoin growth will drain bank deposits. He argues the opposite may be true, since much of the demand for stablecoins comes from outside the US. Because issuers must hold reserves in Treasury bills and bank deposits, growing stablecoin adoption can actually increase overall banking activity.

Malekan also notes that stablecoins don’t threaten lending—only bank margins. Banks could compete by offering better interest rates instead of paying savers an average of just 0.62%. Since banks provide only about 20% of US credit, with most lending coming from non-bank institutions, stablecoins could even strengthen the broader financial system through cheaper payments and more efficient capital flows.

[cryptoenthusiast]

if stablecoins force banks to actually compete, that sounds like a win