US banks' warning on Trump's stablecoin strategy

US President Donald Trump's strategy of using stablecoins to spread the dollar and help refinance debt by buying short-term Treasuries as collateral is now setting off alarm bells in US banks. For years, current accounts in the US have paid almost zero interest, becoming a free car park of liquidity for banks. Now, however, that model may be challenged by the arrival of yield-bearing stablecoins, digital tokens pegged to the dollar that in some cases promise interest of between 4% and 8% per annum, often through investments in US Treasury securities or decentralised finance strategies. If these instruments were to spread on a large scale, the big banks warn, a significant portion of the deposits currently held in current accounts could shift to digital wallets.

While this problem threatens the banks, it is not clear what real benefits it can really bring to the refinancing of US debt. In 2026 alone, the US Treasury will in fact have to place 10 trillion of debt on the market, while the whole world of stablecoins is today worth just over 300 billion. Different sizes. So much so that the Tether group, the first issuer of digital currencies pegged to the dollar, has in its portfolio an admittedly important amount of Treasuries in absolute terms (over 135 billion dollars) but not so important in relation to the US federal debt, which has exceeded 30 trillion dollars.

The US banking industry estimates that up to USD 6.6 trillion could flow out of the traditional banking system, reducing the resources institutions use to lend to households and businesses and shifting a growing portion of savings to less regulated fintech and crypto operators. Although interest in stablecoins has grown and their use is expanding, they remain for now a tool used mainly by those already inside the cryptocurrency ecosystem. They serve mainly as a stable digital currency to buy other tokens or move funds between platforms. Recently, however, they are also starting to be seen as a way to store digital dollars and earn a return, often linked to interest generated by US Treasury bonds or lending platforms in the crypto world. Another element that is favouring their spread is their usefulness in international payments. Stabilecoin transfers can be made almost instantaneously and at a much lower cost than traditional wire transfers or money transfer services. For some users, they are therefore a practical solution for sending money abroad or moving funds between different financial services without going through the traditional banking system. But this is the main problem with traditional banks.

The risk, in essence, is that of creating a parallel banking system, with fewer rules, claim the large banks: products that function in fact like deposit accounts, but which are not subject to the same rules and controls as the banking system. Executives of the American bank Jp Morgan Chase have warned that instruments with similar characteristics to deposits, but without the same prudential guarantees developed over decades of banking regulation, could increase the risks for savers and for the stability of the financial system. In fact, one of the main differences concerns the protection of deposits. In the US, bank accounts are covered by Federal Deposit Insurance Corporation insurance up to $250,000 per customer, a protection that does not exist for stablecoins. Although many of these tokens are backed by cash reserves or Treasury securities to maintain a one-to-one relationship with the dollar, past episodes have shown that stability is not always guaranteed.