Interest payments on stablecoins do not pose a threat to the banking system, stated Circle CEO Jeremy Allaire during the World Economic Forum in Davos. He remarked that fears of potential deposit outflows are ‘absolute absurdity’. According to him, reward systems enhance customer loyalty, but their impact is insufficient to undermine monetary policy.
Allaire drew a parallel with government money market funds, which in the past faced similar warnings about capital outflows from banks. Despite this, the sector has grown to $11 trillion, and lending has not ceased.
The Circle CEO noted that the structure of borrowing is already changing. Financing is shifting from banks to private lending and capital markets. These, rather than bank loans, have provided a significant portion of U.S. GDP growth in recent cycles.
Allaire also highlighted artificial intelligence as a key driver for the mass adoption of digital assets. Billions of AI agents will require an automated payment system. In the businessman’s view, stablecoins have ‘no alternatives’ in this niche.
A similar stance was expressed in Davos by former Binance head Changpeng Zhao. He emphasized the importance of using cryptocurrencies for transactions between neural networks.
Earlier in January, SkyBridge Capital founder Anthony Scaramucci explained how U.S. banks are undermining stablecoins to benefit China.