Circle chief executive Jeremy Allaire said interest payments on stablecoins do not pose a threat to banks.
Speaking at the World Economic Forum in Davos, Allaire described claims that stablecoin yields could trigger bank runs as “totally absurd.”
“They help with stickiness, they help with customer traction,”
Jeremy Allaire said, adding that interest levels are not large enough to undermine monetary policy.
His comments come amid debate over stablecoin yields and proposed regulation under the US CLARITY Act.
Allaire compared stablecoins to government money market funds, which previously faced similar concerns about draining bank deposits.
“Around $11 trillion of dollar money market funds have grown in various circumstances,”
Jeremy Allaire said, noting this has not halted lending.
He added that lending is already shifting away from banks towards private credit and capital markets in the United States.
Allaire said future lending models could be built on top of stablecoins rather than traditional banking infrastructure.
He also argued that stablecoins are essential for artificial intelligence-driven payments.
“There is no other alternative other than stablecoins for billions of AI agents needing payments”,
Jeremy Allaire said.
Similar views were echoed at Davos by industry leaders discussing AI-driven crypto payments.