Stablecoin Yields: A Growing Risk for Banks

Recent comments from banking giant Citi have highlighted a potential shift in financial landscape. Their expert, Ronit Ghose, warns that the high returns offered on stablecoins could lead to a massive withdrawal of funds from traditional bank deposits. This echoes concerns from the 1980s when money market funds offered significantly higher rates than savings accounts, causing a substantial migration of deposits and forcing banks to increase interest rates across all offerings. Ghose’s analysis raises the question: will stablecoin yields become a driving force in banking disruption?