New regulations around stablecoins are driving banks to reconsider their deposit yields. Patrick Collison, CEO of Stripe, predicts this trend will occur as stablecoin volume increases and competition heats up. Collison’s comments follow a recent post by venture capitalist Nic Carter highlighting the growing influence of yield-bearing stablecoins. 0.40% is the average interest rate for savings accounts in the US and 0.25% in Europe – far below market rates, according to Collison. Some advocate for stricter regulations to limit rewards offered on stablecoin deposits. Collison argues that while cheaper deposits are advantageous for consumers, a move towards consumer-hostile practices could hinder banks’ long-term success. This shift follows the rise of stablecoins since 2023 and the passage of the GENIUS bill in the US. The law established a framework for regulated stablecoins but also prohibited yield-sharing practices, a move that led to banking industry resistance. Senator Gillibrand voiced concerns over stablecoin issuers offering interest, fearing it could dissuade customers from using traditional banks. This shift is viewed as natural evolution by leaders in the cryptocurrency space who predict stablecoins will eventually replace traditional fiat payments. Reeve Collins, co-founder of Tether, believes that all currency will eventually become stablecoins, retaining familiar names like dollars and yen. This transition signifies a fundamental change within the financial sector as digital currencies challenge conventional banking practices.