Jefferies analysts: Stablecoin boom may erode traditional banks' profits

PANews March 11—According to CoinDesk, investment bank Jefferies released a report stating that as the application of digital dollars expands in payments and the crypto market, the growing adoption of stablecoins may gradually erode the profits of traditional banks. Analysts expect that over the next five years, banks' core deposits could decline by 3% to 5%, resulting in an average decrease in bank earnings of about 3%, mainly due to rising funding costs and pressure on fee income.

The report notes that while stablecoins are unlikely to trigger a sudden deposit run, the gradual risk of deposit outflows from emerging yield opportunities and payment use cases should not be ignored. The 2025 GENIUS Act prohibits regulated stablecoin issuers from directly paying yields to passive holders, reducing the risk of sharp deposit outflows in the short term. However, in the long term, activity-based rewards from stablecoin trading and payment settlements, as well as yields from DeFi staking and lending protocols, may still pose similar threats to bank deposits. Jefferies pointed out that banks with a higher proportion of retail and interest-bearing deposits face greater risks.