Stablecoin rewards are rapidly gaining traction, posing a significant challenge to traditional banks' deposit models. Since July, the stablecoin market has expanded by over $50 billion, surpassing $300 billion in total value. Interest-paying stablecoins, such as PayPal's PYUSD, have experienced triple-digit growth, offering up to 4% rewards to holders.
Coinbase CEO Brian Armstrong criticized banks for attempting to ban these yields, suggesting it is an effort to maintain their monopoly. Tushar Jain of Multicoin Capital highlighted that the entry of tech giants into the stablecoin space will pressure banks to offer more competitive interest rates to depositors. Currently, banks offer less than 1% interest to users while retaining most of the interest from Treasury bills.
Stablecoin Rewards Surge, Challenge Traditional Banks
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