Stablecoins Trigger Panic in U.S. Banks After New Law Passes
America’s banking sector is growing increasingly uneasy as stablecoins gain legal ground.
With the recent signing of the GENIUS Act by President Donald Trump, the U.S. has taken a major step toward legitimizing stablecoins—sending shockwaves through traditional financial institutions.
The fear isn’t about crypto volatility but about stability itself. If stablecoins become widely adopted, banks could face a dramatic outflow of deposits. A Treasury report estimates the shift could exceed $6.6 trillion, especially if stablecoin platforms offer returns that compete with bank interest rates—even indirectly.
Programs like Coinbase’s 4.10% reward on USDC have already raised eyebrows, with critics arguing they replicate interest-bearing accounts under another name.
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Banking groups are calling for stricter limits on stablecoin incentives and demanding regulatory parity. Concerns also extend to whether stablecoin issuers might gain access to Federal Reserve tools without facing the same oversight. If funds migrate from insured accounts to pooled stablecoin holdings, the broader financial system could be exposed to new liquidity and credit risks.
Despite the pushback, some major banks are exploring launching their own stablecoins to avoid falling behind tech firms entering the space. Mastercard, by contrast, appears more collaborative, viewing stablecoins as a tool for streamlining global payments rather than a threat.
Alexander Zdravkov is a market analyst and crypto journalist with interests in economics, broader financial markets and digital assets. His journey into crypto began more than four years ago, driven by a fascination with the rapid evolution of blockchain technology and the transformative potential of decentralized finance. He began analyzing market cycles and identifying emerging trends before they reach the mainstream. He holds a degree in International Relations - a background that helped shape his broader perspective on global economics, geopolitics, and the interconnected nature of modern financial markets. Whether covering the latest developments in the crypto sector or exploring broader macroeconomic themes, Alexander focuses on giving readers context rather than simply repeating headlines. During his career, he has authored more than 10,000 articles covering cryptocurrencies, traditional finance, and global market developments. His work spans everything from Bitcoin and altcoins to macroeconomic trends influencing risk assets worldwide.
