Banks’ concern over stablecoins ‘ignores reality’: Coinbase

US banking groups have urged Congress to clamp down on stablecoin yields, arguing it would trigger a US banking customer exodus.

Concerns that crypto stablecoins will harm US banks by cannibalizing banking deposits are ill-placed and don’t consider the real-world uses of the tokens, according to Coinbase researchers.

“The ‘stablecoins will destroy bank lending’ narrative ignores reality,” Coinbase policy chief Faryar Shirzad said on Wednesday.

Shirzad shared a market note that said the arguments over stablecoins impact on bank deposits and lending “echo familiar worries from earlier innovations like money market funds. Yet they fail to account for how and where stablecoins are actually used.”

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