Jeremy Allaire said interest-bearing stablecoins do not threaten banks, calling concerns about bank runs “totally absurd” at the World Economic Forum in Davos. Jeremy Allaire said interest-bearing stablecoins do not threaten banks, calling concerns about bank runs “totally absurd” at the World Economic Forum in Davos.

Circle CEO Dismisses Stablecoin Yield Fears as “Totally Absurd”

2026/01/23 14:01
2 min read
  • Circle CEO Jeremy Allaire rejected claims that interest-bearing stablecoins threaten bank stability, noting that money market funds grew to $11 trillion without causing bank runs.
  • Allaire envisions stablecoins as a foundational layer for future lending, following a broader trend of credit shifting from traditional banks toward private capital markets.
  • He predicts that artificial intelligence will drive massive adoption, as billions of AI agents will require stablecoins as a native, programmable payment infrastructure.

Circle (USDC) CEO Jeremy Allaire dismissed claims that interest-bearing stablecoins could trigger bank runs, calling the concern “totally absurd” while speaking Thursday at the World Economic Forum in Davos.

Allaire said paying yield is mainly a customer retention tool and not large enough to undermine monetary policy. His comments come as U.S. policymakers debate whether stablecoin issuers should be allowed to share interest with users, including in discussions around the proposed CLARITY Act, a draft federal market-structure framework for digital assets (which is now delayed for several weeks).

Meanwhile, lending is already shifting away from banks toward private credit and capital markets. In the US, much of GDP growth over multiple cycles has been funded through capital-market debt, not bank loans. We want to build models for lending that build on top of stablecoins.

Jeremy Allaire, CEO of Circle.

Read more: Analyst: Why Chainlink Matters More Than Most Investors Realise

AI to Lead Stablecoin Payments

He compared the current warnings to past criticism of government money market funds, which were once accused of pulling deposits out of banks. Those funds have grown to about US$11 trillion (AU$16.83 trillion) without stopping credit from flowing through the economy, he said.

Allaire also argued that lending has already been shifting away from banks toward private credit and capital markets. In the US, he said, multiple cycles of GDP growth have been funded more through capital-market debt than through bank loans, and he wants to build lending models on top of stablecoins.

He added that artificial intelligence could accelerate adoption, saying “billions of AI agents” will need a payment system and that stablecoins are currently the only practical option for that use case.

Related: Behind the Volatility: Key Takeaways from Crypto’s Q4 2025

The post Circle CEO Dismisses Stablecoin Yield Fears as “Totally Absurd” appeared first on Crypto News Australia.

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