Jefferies has released a report indicating that the rise of stablecoins could gradually erode traditional bank profits as digital dollars gain traction in payments and crypto markets. Analysts forecast a 3% to 5% decline in core bank deposits over the next five years, potentially reducing average bank profits by about 3% due to increased funding costs and pressure on fee income. The report highlights that while stablecoins are unlikely to cause sudden bank runs, the gradual outflow of deposits due to new yield opportunities and payment use cases remains a concern. The GENIUS Act of 2025 limits regulated stablecoin issuers from offering yields to passive holders, mitigating short-term risks. However, long-term threats persist from active rewards in stablecoin trading and DeFi protocols, particularly for banks with a high proportion of retail and interest-bearing deposits.