Will stablecoins really threaten banks? Circle CEO provides an answer at Davos

Question

【Crypto World】At the Davos World Economic Forum, Circle CEO Jeremy Allaire stirred the crypto community with his viewpoints. He straightforwardly dismissed the idea that stablecoin interest rates could collapse the banking system as “purely absurd.”

Why does he say that? Allaire compares it to government money market funds—which have long been criticized for draining bank deposits. And what’s the result? Their scale has already expanded to $11 trillion, banks are still lending, and there’s no sign of a financial crisis. Stablecoin interest can attract users, but its size is far from comparable. The real issue isn’t the threat of stablecoins, but that the US financial structure has quietly changed—bank-led lending models are shifting toward private credit and capital markets.

Circle’s approach also reflects this trend. They’re not just issuing tokens but building an entire lending system based on stablecoins. Even more interestingly, Allaire believes that in the future, the payment needs of “billions of AI agents” will make stablecoins the only reliable choice—without them, these autonomous agents simply cannot participate efficiently in economic activities. In other words, stablecoins are not competing with banks but are laying the groundwork for the next generation of financial infrastructure.

MemeCurator · Accepted Answer

Hi, someone finally said it. The traditional banking system has been on the brink for a long time; stablecoins are just accelerating the process.

Circle's move is actually copying traditional finance practices, just with a different guise and track.

I'll say it, the real threat isn't stablecoins themselves, but that traditional banks are already losing their jobs.

This guy's point is quite accurate, but those in finance say "no threat," haha.

Wait a minute, if the scale difference is so big, why is traditional finance still so panicked?

Tokenomics911 · Answer

Really? Still debating the argument that stablecoins are draining bank deposits. What era are we in? The financial landscape has already changed dramatically.

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11 trillion yuan in MMFs has survived until now. Do you really think stablecoins of this size can overthrow? That's a bit too naive, isn't it?

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Alright, Circle is aiming big. Not just issuing tokens but directly building a lending system. That's the real focus.

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To put it simply, banks' market share has already been eroded, and stablecoins are just the tip of the iceberg. The problem lies in the entire system restructuring.

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That logic isn't wrong, but Allaire speaking so confidently makes people wonder if he's being too defensive.

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Private credit and capital markets are taking a bigger share of bank business than the interest on stablecoins attracting deposits. That's the real threat.

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Wait, so what does Circle ultimately want to do? Become a new type of shadow bank? That seems to be the real goal.

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If you can't beat them, join them. Isn't this the combination of traditional finance and crypto?

MidnightMEVeater · Answer

Good morning, night creatures. Here's another "banks won't die" story. The 11 trillion scale money market funds haven't killed banks, and now stablecoin interest rates want to scare people? That's hilarious. The real game is about liquidity traps. Who says the financial structure hasn't changed? These folks have long been redistributing the cake in dark pools.

ExpectationFarmer · Answer

Bro, this logic doesn't quite hold up. Money market funds are part of traditional finance, and the stablecoin ecosystem is completely different.

To put it nicely, Circle isn't trying to steal the banking industry, just not daring to say it outright.

The comparison of 11 trillion to stablecoins feels a bit forced... with such a huge difference in scale, is it really comparable?

It seems the real risk isn't the stablecoins themselves, but the entire financial system undergoing transformation. Banks are gradually losing favor.

Alright, let's see how Circle manages to develop this system. Theory is one thing, but reality is the only true test.

ETHmaxi_NoFilter · Answer

The old banking system is long outdated; stablecoins are the future foundation. Allaire is right on point.

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Another set of talking points, do they really think we don't know how the financial black box works?

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Is the scale not in the same league? Not yet, but give stablecoins a few years.

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Private credit and capital markets... in simple terms, are in the process of de-banking. Circle's move is quite clever.

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Haha, even 11 trillion yuan in money market funds didn't bring down banks, so what are stablecoins afraid of?

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The key is having real application scenarios to support them; otherwise, no matter how much interest is promised, it's all empty talk.

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The shift in financial structure should have happened long ago; centralized banks have monopolized for too long.

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Allaire's words sound nice, but if stablecoins are to be widely adopted, banks will still face significant pressure.

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Building an entire loan system? Sounds like repeating traditional finance again. What's the difference?

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Talking big at Davos again; let's wait until real money lands before we speak.

GateUser-2fce706c · Answer

I've always said that this wave of opportunity is underestimated. The true track for stablecoins is not about threatening banks, but rather a major shift in the financial structure. Those who still don't understand this need to catch up.

The old logic of banks is being dismantled. Private credit and capital markets are the new high ground. Circle's move is very clever; building a loan system is the real wealth secret.

Don't be swayed by those bearish voices. The scale of 11 trillion yuan is right there. History will repeat itself. Those who got on the train early are now the happiest.

This round of adjustment is the best learning opportunity. Those who truly understand the migration logic of finance have already quietly allocated.

For those still worried about whether stablecoins threaten banks, it shows they haven't grasped this wave of big trends.

Allaire's words hit the mark, tearing off the veil of the game between traditional finance and new finance.

Opportunities must be seized, everyone. The big shift is happening right before our eyes.

FlatTax · Answer

To be honest, this logic still doesn't quite hold up... Can a 110 trillion yuan money market fund compare to the scale of stablecoins in the crypto circle? Wake up, these are completely two different things, okay?

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So Circle now wants to become a bank? But you promised decentralization, brother.

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This guy is just blowing smoke at Davos to fool people. Changes in the banking system do exist, but defending with a money market fund is really a stretch.

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Alright, anyway, no matter how the financial structure changes, I, as a retail investor, won't get to enjoy the benefits. Just keep watching the show.

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Wait, so in the end, stablecoins are just turning into another type of financial intermediary? What's the point of calling that innovation?

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Jeremy is indeed good with words, but you should just listen and take it with a grain of salt. If you really believe his nonsense, you'll lose.

GasWaster · Answer

Are banks really that fragile? $11 trillion didn't kill them, and stablecoins still want to turn the tables? That's hilarious.

Gm_Gn_Merchant · Answer

Are stablecoins really a threat to banks? Laughable. The scale difference is so huge, yet people are still making alarmist claims. Has the financial structure already changed?

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So what Circle wants to do is build an entire lending system, not just issue tokens. This approach is actually quite interesting.

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The $11 trillion money market funds haven't caused banks to collapse, yet some people are afraid of stablecoins... It's really an overactive imagination.

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Speaking of the shift in financial structure towards private credit, that seems to be the real trend. Stablecoins are just a surface phenomenon.

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Allaire's words are a direct shot at all the FUD, but I really want to know how exactly Circle's lending system works.

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I'm a bit curious, can the interest from stablecoins really attract users? The people around me mainly seem to care about price fluctuations.

BearMarketHustler · Answer

Haha, this guy is trying to defend stablecoins, makes a lot of sense... but I feel like he's just whitewashing his own business.

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Do banks really fear stablecoins? I think... maybe overestimating their threat level, haha.

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Shifting to private credit and capital markets? Isn't that just financial disintermediation? Old news, should have happened long ago.

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Circle's combination of tactics looks pretty good, but whether it can really succeed is another question... let's wait and see.

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So basically, the financial system is self-adjusting, and stablecoins are just a small player? Interesting.

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That logic... the example of 11 trillion definitely can't be silenced, but with such a huge difference in scale, it's really incomparable.

Will stablecoins really threaten banks? Circle CEO provides an answer at Davos

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