Coinbase refutes claims by banks that stablecoins erode deposits, with Chief Policy Officer Faryar Shirzad arguing against such fears, stating they are unfounded and motivated by banks’ revenue concerns.
The debate intensifies as Coinbase emphasizes stablecoins’ role as payment tools rather than deposit alternatives, dismissing bank concerns while regulators assess impacts on banking systems.
Stablecoins Deemed Non-Threatening to U.S. Bank Deposits
Coinbase’s leadership, particularly Faryar Shirzad, has publicly refuted claims that stablecoins could erode U.S. bank deposits. These statements argue that banks’ concerns are overblown and primarily fueled by fears of losing payment revenue.
The statements highlight that stablecoins are not substitutes for savings but rather payment tools. The involved banks aim to protect their legacy revenue streams rather than address genuine systemic risk concerns in the financial sector.
No Correlation Found Between Stablecoins and Deposit Outflows
Analysis from Coinbase insists there’s no significant link between stablecoin usage and bank deposit outflows. The institutional involvement, including the GENIUS Act, supports coexistence of these sectors without evidence of harm.
Coinbase’s arguments suggest potential shifts in payment dynamics, with stablecoins offering faster, cheaper transfers. The outlined historical context reflects similar banks’ resistance to financial technology advancements like ATMs.
Banking Sector’s Historical Resistance to Tech Innovations
Similar to ATM and online banking adoption, banks previously labeled new technologies as systemic risks. These claims were historically profit-driven, rather than based on actual financial system dangers.
Insights from Kanalcoin and Coinbase illustrate that improved transfer technology shifts market practices, not erodes deposits. Historical analysis points out banks’ resistance stems more from revenue impact rather than risk concerns.
“The central claim — that stablecoins will cause a mass outflow of bank deposits — simply doesn’t hold up. Recent analysis shows no meaningful link between stablecoin adoption and deposit flight for community banks and there’s no reason to believe big banks would fare any worse.” — Faryar Shirzad, Chief Policy Officer, Coinbase
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