Coinbase: No evidence stablecoins are draining bank deposits

There is no evidence to suggest that the growth of stablecoins is eroding U.S. bank deposits, the Coinbase Institute stated in a new report. The institute highlighted that three independent studies—by the White House Council of Economic Advisers, Charles River Associates, and Cornell University Professor Lin William Cong—all reached the same conclusion despite using different methodologies and data. According to Professor Cong's analysis, consumers would only move a significant volume of funds from banks if stablecoin yields surpassed approximately 6%. The report notes that the current interest rate for USDC on Aave (AAVE) is around 4%, below this threshold. The institute also pointed out that while USDC's market capitalization grew to about $75 billion in recent years, regional bank deposits also increased, and a 2024 UCLA study found that 70-80% of U.S. bank deposits do not respond to interest rate changes. Coinbase argued that the emergence of stablecoins actually creates an opportunity for regional and smaller banks to compete more effectively with larger institutions by moving payment and cross-border remittance infrastructure to a shared distribution network.