Circle CEO: Interest Payments on Stablecoins Will Not Pose a Threat to Banks

Foresight News reported, citing Cointelegraph, that Circle CEO Jeremy Allaire stated at the Davos World Economic Forum that interest payments on stablecoins do not pose a threat to banks. Allaire called concerns that stablecoin yields could trigger bank runs "completely absurd," noting that such interest income helps enhance user retention and that the scale of interest is insufficient to undermine monetary policy. Allaire drew an analogy with government money market funds, saying that although such funds were also warned they would drain bank deposits, their scale has grown to about 11 trillion USD and has not prevented bank lending. He further pointed out that, as the U.S. credit model has shifted from bank lending to private credit and capital markets, Circle is committed to building a lending model based on stablecoins. In addition, Allaire emphasized that stablecoins will become the only viable option for payment systems for the "billions of AI agents" in the future.