As a researcher following the crypto space, I’ve been observing a key dynamic regarding stablecoins. A prominent analyst, EGRAG CRYPTO, recently pointed out that the resistance from banks isn’t necessarily about the inherent risk of stablecoins themselves. Instead, it seems banks are concerned about losing control – stablecoins allow individuals to hold, transfer, and even earn money on dollar-denominated assets without needing a traditional bank account. This disintermediation appears to be the core issue.
This reaction follows ongoing discussions in the US Congress about laws for cryptocurrencies and stablecoins. At the same time, banks and those promoting digital assets are disagreeing about whether stablecoins that earn interest could lead people to move money out of traditional banks.
The Exit Banks Never Had to Plan For
On June 1st, EGRAG published an analysis arguing that the issue with stablecoins isn’t simply about regulations, but about a fundamental challenge to traditional bank profits.
He pointed out that when you put money in the bank, you’re not actually storing it – legally, you’re loaning the bank your money. The bank then lends that money to others at interest rates ranging from 6% to 28%, while only paying you between 0.1% and 0.5% in return. The difference between these rates is how the bank makes its profit.
The analyst points out that stablecoins are disrupting the traditional financial system by uncoupling three functions that banks usually handle together: safekeeping of assets, finalizing transactions, and earning returns.
This stablecoin, secured by U.S. Treasury bills, lets you hold dollars digitally without needing a bank account. You can send and receive money instantly, without going through a middleman, and potentially earn around 5% with virtually no risk.
EGRAG believes that if people could earn between 4% and 6% on their money while maintaining complete control – without relying on banks – they’d have no reason to keep their money in banks. This, EGRAG argues, would weaken the banks’ funding and reduce their overall influence.
‘That’s the real threat and they will make wars and move tanks to stop it,” claimed the analyst.
From my perspective, EGRAG’s concerns seem reasonable. Earlier this year, Standard Chartered published an analysis suggesting US banks could see around $500 billion in deposits move to stablecoins by 2028. The biggest impact of this shift would likely be felt by regional banks.
Geoff Kendrick at Standard Chartered notes that the companies behind the two biggest stablecoins, Tether (USDT) and Circle (USDC), primarily hold reserves in U.S. Treasury bonds instead of traditional bank accounts. This means that only a small amount of their funds are being re-deposited into the banking system.
What the Legislative Fight is Really About
In the recent Senate Banking Committee discussions about the CLARITY Act, the American Bankers Association quickly mobilized its members, sending over 8,000 letters to senators in under a week. These letters focused on proposed regulations for how stablecoins earn returns.
Senator Bernie Moreno recently criticized banks, claiming they were attempting to eliminate stablecoins – a type of digital currency that could allow people to earn more interest on their savings. He further described the banking industry as a group determined to maintain their traditional, low-interest savings accounts.
EGRAG’s analysis interpreted that response as its own kind of signal, writing:
The fact that banks are actively opposing stablecoins, and there’s intense lobbying and legislative delays surrounding them, proves they see stablecoins as a real threat. If stablecoins were unimportant, there wouldn’t be such a strong reaction.
A recent Ripple survey from March showed that a significant majority of finance leaders – 74% – view stablecoins as valuable for freeing up funds and streamlining how companies manage their finances. This indicates that institutions are no longer just researching stablecoins, but actively considering their use.
The stablecoin market continues to expand rapidly, currently valued at around $320 billion according to DefiLlama. Tether (USDT) dominates with $188 billion, followed by USD Coin (USDC) at $76 billion.
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2026-06-01 23:45