U.S. Stablecoin Yield Debate Challenges Core Banking Model on Deposits

The U.S. legislative debate over allowing yield on stablecoins is a proxy for a fundamental challenge to the traditional banking system, where deposits typically earn little for consumers while banks capture most economic upside. The conflict pits banks defending their deposit-based credit model against crypto firms seeking to pass yield directly to holders. This shift reflects a growing consumer expectation that digital balances should earn by default, moving value from intermediaries to end-users. Banks argue this threatens credit availability, but proponents counter that credit would reorganize through capital markets and transparent, rule-based infrastructure rather than vanish. The debate signals a broader transition in how deposit value is allocated, extending beyond crypto to tokenized assets.