The battle between Stablecoins and traditional banks intensifies, with the American Bankers Association listing "Ban on Stablecoin Yield" as a top priority issue
By: theblockbeats.news|2026/01/23 19:00:31
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In BlockBeats news on January 23, the American Bankers Association (ABA) stated that it will make "Suppressing Interest/Earnings/Reward-bearing Payment Stablecoins" a top policy priority in 2026, showing concerns about stablecoins becoming a substitute for bank deposits.
Earlier this month, Bank of America's CEO warned that if the U.S. Congress does not restrict interest-bearing stablecoins, up to $60 trillion in deposits could move away from banks, representing about 30% to 35% of total U.S. commercial bank deposits. The CEO mentioned that stablecoins operate like money market mutual funds, holding reserves in short-term instruments (e.g., U.S. Treasuries) instead of using them for bank loans as traditional banks do. In this model, funds move outside the traditional banking system, causing a contraction in the deposit base that banks rely on to support household and business lending.
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