Evidence undermines banks’ case against stablecoin rewards

The American Bankers Association has been warning that stablecoin rewards will siphon deposits from community banks. The actual numbers tell a different story. Community bank deposits have grown by roughly $482 billion, a 26% increase, from June 2019 to March 2026. That growth happened during the exact period when platforms like Coinbase were offering rewards on stablecoin holdings. The data versus the lobbying Coinbase Chief Policy Officer Faryar Shirzad laid out the counterargument in a recent opinion piece, pointing to multiple studies that undercut the ABA’s position. Research from Charles River Associates found no statistically significant relationship between stablecoin activity and declines in bank deposits. The White House Council of Economic Advisers reached a similar conclusion independently. The White House analysis went further, modeling what would happen if stablecoin rewards were banned entirely. The result: traditional lending would increase by approximately 0.02%, translating to around $2.1 billion. The White House economists found it would predominantly flow to larger banking institutions, not the community banks the ABA claims to be protecting. Coinbase has offere...