Stablecoin Yields Threaten Bank Deposits as Expert Warns of Potential Outflow Surge

A prominent Citi executive has raised concerns about the impact of paying interest on stablecoin deposits, warning that this could trigger a significant withdrawal from traditional banking systems. In a report published Monday, Ronit Ghose, head of Future of Finance at Citi, compared potential outflows caused by stablecoin interest payments to the money market fund boom of the 1980s. This boom saw funds grow from $4 billion in 1975 to $235 billion by 1982, exceeding bank deposit rates and leading to massive withdrawals.