Experts are sounding the alarm about potential banking upheaval fueled by the burgeoning interest-paying stablecoin landscape. Ronit Ghose, Citi’s Future of Finance head, warns that offering interest on stablecoins deposits could trigger a surge in bank outflows similar to the 1980s money market fund boom. His reasoning stems from a historical pattern: rising returns offered by these funds (which grew from $4 billion to $235 billion in just over a decade) encouraged customers to pull their money out of traditional banks, leading to massive outflows exceeding new deposits by over $32 billion between 1981 and 1982. This trend is echoed by Sean Viergutz from PwC who suggests that interest-bearing stablecoins could negatively impact the banking sector, potentially forcing banks to hike deposit rates or rely more on wholesale markets, both of which could drive up credit costs for individuals and businesses.