Jefferies analyst: Stablecoin craze may erode traditional bank profits.

PANews reported on March 11 that, according to CoinDesk, investment bank Jefferies released a report stating that as the application of the digital dollar expands in the payments and crypto markets, the proliferation of stablecoins may gradually erode the profits of traditional banks. Analysts predict that core bank deposits may decline by 3% to 5% over the next five years, leading to an average bank profit decrease of about 3%, mainly due to rising funding costs and pressure on fee income.

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