Banks worried stablecoins will siphon off their deposits

Check out this article if you wanna read more: US banks are pushing back against stablecoin interest because they’re scared of losing deposits. The Genius Act doesn’t let banks offer yields. Sure, they can make their own stablecoins, but paying interest isn’t allowed. Banks are concerned people will choose exchanges instead, since you can stake stablecoins on those platforms and earn yields. They think this could push folks to move money from their bank accounts to exchanges, buy USDT or USDC, and start staking for some returns. What’s the deal with banks being so worried? I mean, isn’t it true that you can earn APR just by keeping US dollars in banks? Do they really think people will ditch USD for stablecoins like USDT or USDC? And why didn’t they suggest to Trump that the Genius Act should’ve allowed yields too? Or is that what they’re kinda hinting at?

Banks run on interests and for that reason their are also after the charges the get from the customers and even though their have a stable coins, their interest generation and operations that generate the interest their could pay to customer holding those banks stable coins can't be compared to that of an exchange. Take for example, how many Banks can generate the daily trading and staking and other Centralized exchange like binance volumes and cap.

Yea you are right, but it can simply be that people are tired and sick of banks BS. Banks can be inconsistent and people don’t find their services attractive. Looking at the long term challenges that can come from banks is enough to for exchanges.

In my country, there are banks that generate interest also. I do not know of United States, the fintechs in my country can give as high as 20% up to certain amount, and 9 to 10% if that amount is exceeded. There is even one with premium features in a way that you can save up to certain amount for 7 to 15 days and earn up to 36%. The commercial banks should try and step up. I think you are right though because commercial banks here are frustrating, although most people are using the account that have no yield and the banks will be the one that will be deducting customers money instead and call it maintenance charges. The banks should step up or they will be obsolete in some areas.