Banks pay you 0.1% on your savings. Stablecoins pay 4%.

That’s why the banking lobby is trying to ban stablecoin yields in DC.

The market structure bill has stalled because banks are warning they could lose $6 trillion in deposits if this is allowed.

For years, detractors depicted crypto as a risk to the financial system – shadowy, offshore, full of scams.

Now they’re admitting crypto is a risk to banks simply because it’s better.

To be fair, the banking lobby’s concerns aren’t purely self-interested. Where stablecoin issuers move dollars into treasury bills, banks use deposits to fund mortgages and business loans. If $6T leaves, lending rates go up.

But should consumers subsidize the banking system’s lending capacity by accepting 0.1% when market rates are 4%?

While that gets settled in DC, my main point is that crypto is finally going toe to toe with TradFi on pure product.

Stablecoins still have tradeoffs – no FDIC insurance, not as widely accepted. But as a deposit, a stablecoin held on Coinbase earning 4% is simply a better product than dollars held at Bank of America earning basically zero.

Crypto is finally better in practice, not just theory.

Stablecoins are just the beginning.

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