‘Totally Absurd’: Circle CEO Rejects Bank-Run Fears Over Stablecoin Yields

Circle CEO Jeremy Allaire has slammed concerns that stablecoin yields could trigger bank runs, calling them “totally absurd” during a Davos panel at the World Economic Forum. His blunt pushback adds fuel to the ongoing debate over regulation and clears the air around how stablecoins actually fit into the modern financial system, separating noise from reality in today’s crypto news.

Stablecoin yields are not a threat to banks

Allaire stressed that paying interest on stablecoins doesn’t threaten the stability of banks any more than existing financial products already do. “They help with customer stickiness, they help with onboarding, they’re not a threat to the banking system,” he said, arguing that yields are simply a competitive feature, not a destabilizing force.

He pointed out that yields on stablecoins often sit in line with traditional money market funds, which have safely coexisted with banks for decades. That comparison is key: just as money market funds didn’t destroy banks, stablecoin yields are unlikely to cause any kind of systemic “run” on deposits.

Money market funds are the real precedent

One of Allaire’s strongest arguments is historical context. The US already has about $11 trillion in dollar money market funds, which offer attractive yields and compete directly with bank deposits, yet the banking system continues to lend and grow.

The bigger story, he explained, is a structural shift in finance: lending in the US economy is already gradually moving away from traditional banks. The majority of GDP growth over recent cycles has been funded by private credit and capital markets, not bank loans. Stablecoins are just the next step in this evolution, not a radical disruption that breaks the system.

Why stablecoins are the future of programmable money

Beyond yield, Allaire highlighted a more forward-looking role for stablecoins: they’re becoming the primary money for next-gen systems, especially AI agents. He argued that billions of AI bots will need a fast, reliable, programmable payment layer, and the only viable option today is stablecoins.

“There is no other alternative than stablecoins to do that right now,” Allaire said. This vision aligns with views from others at Davos, including former Binance CEO Changpeng Zhao, who sees crypto payments as essential for AI-driven transactions. Galaxy Digital’s Michael Novogratz has also predicted that AI agents will become the biggest stablecoin users “sometime in the near distant future.”

For crypto pur builders, this is a strong signal: stablecoins aren’t just for trading or DeFi. They’re becoming the plumbing for the next internet economy, where AI and blockchain technology work together to power a new financial layer.

Stablecoin yields vs. US banking resistance

The debate over stablecoin yields is central to the CLARITY Act and other US crypto bills, where many banking groups are pushing to ban or limit yields on stablecoins. They fear that 5%+ returns on stablecoins could pull large deposits away from traditional savings accounts.

But Allaire’s message is clear: stablecoins complement existing finance; they don’t replace it overnight. By integrating with money markets and capital markets, they expand the availability of safe, yield-bearing dollars, not weaken the banking system.

What this means for crypto pur investors

For crypto pur traders and long-term holders, Circle’s stance is reassuring:

• Stablecoin yields are here to stay — they’re not some temporary gimmick that will be wiped out by regulation.
• Stablecoins are infrastructure — not just a crypto product, but a core layer of digital money for the next decade.
• USDC is a major beneficiary — as the largest USD-pegged stablecoin on multiple blockchain networks, it’s poised to capture the lion’s share of growth in payments, DeFi, and AI agent use.

If the US does pass sensible stablecoin rules, the result could be a powerful dollar-based digital payment system that rivals traditional bank rails, and even competes with China’s digital yuan on a global scale.

The bigger picture: Stablecoins as global money rails

Allaire’s argument ultimately comes down to one idea: stablecoins are the logical evolution of the blockchain-centered financial system. They’re not trying to kill banks; they’re building a new lane for dollars that’s faster, cheaper, and more programmable.

For the crypto pur community, that’s a powerful narrative: stablecoins are the only mature, scalable, and widely adopted crypto-native form of money that can plug into the real world, from DeFi and remittances to AI agents and cross-border payments.

If yields are allowed to continue, and regulation is thoughtful, stablecoins could become the de facto onchain money of the next decade, not just in crypto, but in the broader global economy.