The world’s biggest payment companies are starting to acknowledge what crypto builders have been saying for years: stablecoins might do to banks what email did to the post office.
Patrick Collison, CEO of Stripe, believes the evolution of blockchain-based digital dollars will eventually leave traditional banks with no choice but to pay meaningful yields on deposits. “Cheap deposits may have worked for decades,” he hinted in a post responding to venture capitalist Nic Carter, “but the era of one-sided consumer relationships is ending.”
The Stablecoin Revolution Banks Didn’t See Coming
Over the past two years, stablecoins have transformed from a crypto niche into a global financial instrument. Their market capitalization has soared since 2023, thanks in part to the GENIUS Act – the U.S. law that gave stablecoin issuers a clear regulatory pathway. Yet, the same legislation also banned the payment of interest on these tokens, effectively protecting banks from immediate competition.
That protection, however, may be temporary. As digital dollars circulate freely across decentralized and institutional platforms, stablecoins are beginning to expose the structural inefficiencies of the banking sector.
In the U.S., the average savings rate sits at 0.40%, and in the EU, it’s just 0.25% – a sharp contrast to the returns available across decentralized finance. Collison believes consumers won’t tolerate that gap forever. “Depositors deserve to earn something closer to market returns,” he said, warning that financial institutions will eventually have to adapt or risk losing trust.
The Battle Over Yield-Bearing Tokens
Traditional banks aren’t taking this shift lightly. Lobbyists have already moved to restrict stablecoin issuers from offering interest-bearing versions, fearing that customers would move their money away from legacy systems entirely.
During congressional hearings earlier this year, Senator Kirsten Gillibrand echoed those concerns, asking, “If stablecoins start paying interest, why would anyone keep money in a bank?” Her question underscored the existential challenge regulators now face – balancing innovation with the survival of the traditional financial system.
A Glimpse of What’s Next
Crypto leaders say that future is inevitable. Tether co-founder Reeve Collins, speaking at Token2049, predicted that all money will eventually exist in digital form. “Even fiat will become a stablecoin,” he said. “It’ll still be called dollars or euros – it’ll just move on faster, cheaper rails.”
For now, stablecoins remain a bridge between two worlds: the old one of banking bureaucracy and the emerging digital economy. But if Collison’s forecast proves right, they might also become the force that finally pushes banks to reward depositors – not because they want to, but because the market demands it.
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Alex is an experienced financial journalist and cryptocurrency enthusiast. With over 8 years of experience covering the crypto, blockchain, and fintech industries, he is well-versed in the complex and ever-evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His approach allows him to break down complex ideas into accessible and in-depth content. Follow his publications to stay up to date with the most important trends and topics.
Source: https://coindoo.com/banks-are-in-trouble-stripe-ceo-says-stablecoins-will-make-them-pay-up/