U.S. community bankers are sounding the alarm: they warned the Senate that yield-bearing stablecoins could siphon off up to $6.6 trillion in bank deposits.

They claim that if people can get interest/rewards on stablecoins without FDIC insurance, local lending for small businesses and farmers will collapse.

Meanwhile, JPMorgan is playing it cool. They downplayed the threat, saying there have always been "multiple layers of money" and that deposit tokens and stablecoins are just "complementary".

Is this a real systemic threat to the banking system, or is it just the "banking lobby" trying to kill competition?

bitcoin

U.S. community bankers are sounding the alarm: they warned the Senate that yield-bearing stablecoins could siphon off up to $6.6 trillion in bank deposits.

They claim that if people can get interest/rewards on stablecoins without FDIC insurance, local lending for small businesses and farmers will collapse.

Meanwhile, JPMorgan is playing it cool. They downplayed the threat, saying there have always been "multiple layers of money" and that deposit tokens and stablecoins are just "complementary".

Is this a real systemic threat to the banking system, or is it just the "banking lobby" trying to kill competition?