Circle CEO: Interest payments on stablecoins will not pose a threat to banks

CoinWorld reports that Circle CEO Jeremy Allaire stated at the World Economic Forum in Davos that interest payments on stablecoins do not pose a threat to banks. Allaire described concerns that stablecoin yields might trigger bank runs as “completely absurd,” and pointed out that such interest earnings help enhance user stickiness and are not large enough to weaken monetary policy. Allaire drew an analogy with government money market funds, saying that although these funds have also been warned about drawing deposits from banks, their size has grown to approximately $11 trillion and has not prevented bank lending. He further noted that since the U.S. credit model has shifted from bank loans to private credit and capital markets, Circle is committed to building a lending model based on stablecoins. Additionally, Allaire emphasized that stablecoins will become the only feasible payment system for “billions of AI agents” in the future.