{"id":75763,"date":"2025-09-10T13:28:32","date_gmt":"2025-09-10T10:28:32","guid":{"rendered":"https:\/\/forklog.com\/en\/?p=75763"},"modified":"2025-09-10T13:30:12","modified_gmt":"2025-09-10T10:30:12","slug":"us-banks-urged-to-raise-deposit-rates-to-compete-with-stablecoins-says-bitwise-cio","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/us-banks-urged-to-raise-deposit-rates-to-compete-with-stablecoins-says-bitwise-cio\/","title":{"rendered":"US Banks Urged to Raise Deposit Rates to Compete with Stablecoins, Says Bitwise CIO"},"content":{"rendered":"<p>US financial institutions should increase deposit rates to compete with the growing popularity of stablecoins, according to Matt Hougan, Chief Investment Officer at Bitwise.<\/p>\n<blockquote class=\"twitter-tweet\">\n<p lang=\"en\" dir=\"ltr\">These scare articles about stablecoins destroying local lending markets are absurd. <\/p>\n<p>If local banks are worried about competition from stablecoins, they should pay more interest on deposits. They&#8217;re only worried because they&#8217;ve been abusing depositors as a free source of\u2026 <a href=\"https:\/\/t.co\/WDALrdLxGp\">https:\/\/t.co\/WDALrdLxGp<\/a><\/p>\n<p>\u2014 Matt Hougan (@Matt_Hougan) <a href=\"https:\/\/twitter.com\/Matt_Hougan\/status\/1965409717100175491?ref_src=twsrc%5Etfw\">September 9, 2025<\/a><\/p><\/blockquote>\n<p> <script async src=\"https:\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;If local banks are worried about competition from &#8216;stable coins&#8217;, they need to pay more interest on deposits. This concern is only because they have been exploiting depositors as a free source of capital for decades,&#8221; he noted.\u00a0<\/p>\n<\/blockquote>\n<p>Hougan also countered arguments that lending in the US would cease if stablecoins continue to capture the traditional market.\u00a0<\/p>\n<p>In his view, banks will indeed reduce their share in lending, but this will be offset by lending DeFi tools.\u00a0<\/p>\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p>&#8220;Markets are great at solving problems: the losing side here is the banking margin. The winning side is individual depositors. The economy will be just fine,&#8221; concluded the Bitwise executive.\u00a0<\/p>\n<\/blockquote>\n<p>Hougan expressed his thoughts in response to a &#8220;scare&#8221; <a href=\"https:\/\/www.bloomberg.com\/news\/articles\/2025-09-08\/stablecoins-like-tether-usdc-have-small-banks-businesses-worried\">article by Bloomberg<\/a>. It stated that small community and regional banks face a new competitive threat from stablecoins as they rely on customer deposits to support lending.<\/p>\n<p>Meanwhile, large institutions still have access to more liquid wholesale capital.\u00a0<\/p>\n<p>The article compares yield-offering &#8220;stable coins&#8221; to the emergence of money markets in the 1970s, which provided a more profitable alternative to traditional savings accounts, leading to a depletion of bank deposits.\u00a0<\/p>\n<p>According to <a href=\"https:\/\/www.bankrate.com\/banking\/savings\/average-savings-interest-rates\/#national\">Bankrate<\/a>, as of August 2025, the average <span data-descr=\"annual percentage yield\" class=\"old_tooltip\">APY<\/span> on savings accounts in the US is 0.6%, with the highest rate at 4.35%.<\/p>\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/img-c023c37682704913-3892428093405969.webp\" alt=\"image\" class=\"wp-image-265565\"\/><figcaption class=\"wp-element-caption\">Source: Bankrate.<\/figcaption><\/figure>\n<p>Many stablecoins offer a base rate for holding above 5%, and APY in some liquidity pools can exceed 10%.<\/p>\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"346\" src=\"https:\/\/forklog.com\/wp-content\/uploads\/img-f1d29f163cb66b4d-3892439695443192-1024x346.png\" alt=\"image\" class=\"wp-image-265566\" srcset=\"https:\/\/forklog.com\/wp-content\/uploads\/img-f1d29f163cb66b4d-3892439695443192-1024x346.png 1024w, https:\/\/forklog.com\/wp-content\/uploads\/img-f1d29f163cb66b4d-3892439695443192-300x101.png 300w, https:\/\/forklog.com\/wp-content\/uploads\/img-f1d29f163cb66b4d-3892439695443192-768x259.png 768w, https:\/\/forklog.com\/wp-content\/uploads\/img-f1d29f163cb66b4d-3892439695443192-1536x519.png 1536w, https:\/\/forklog.com\/wp-content\/uploads\/img-f1d29f163cb66b4d-3892439695443192.png 1655w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><figcaption class=\"wp-element-caption\">Liquidity pool rates for stablecoins. Source: <a href=\"https:\/\/defillama.com\/yields\/stablecoins\">DeFi Llama<\/a>.<\/figcaption><\/figure>\n<p>Back in July 18, US President Donald Trump <a href=\"https:\/\/forklog.com\/en\/news\/donald-trump-enacts-stablecoin-legislation\">signed<\/a> the federal GENIUS Act, initiating comprehensive regulation of &#8220;stable coins&#8221; in the country.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>US banks should raise deposit rates to compete with the growing popularity of stablecoins, said Bitwise CIO Matt Hougan.<\/p>\n","protected":false},"author":1,"featured_media":75765,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"1","news_style_id":"1","cryptorium_level":"","_short_excerpt_text":"US banks should raise deposit rates to compete with stablecoins, says Bitwise CIO.","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[1229,949,1138,807],"class_list":["post-75763","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-banks-and-fintech","tag-bitwise","tag-opinions","tag-stablecoins"],"aioseo_notices":[],"amp_enabled":true,"views":"126","promo_type":"1","layout_type":"1","short_excerpt":"US banks should raise deposit rates to compete with stablecoins, says Bitwise CIO.","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/75763","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=75763"}],"version-history":[{"count":1,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/75763\/revisions"}],"predecessor-version":[{"id":75766,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/75763\/revisions\/75766"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/75765"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=75763"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=75763"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=75763"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}