Banker Says Stablecoin Yield A “Detriment,” Kraken CEO Hits Back

Kraken CEO Dave Ripley has fired back against a senior executive of the American Bankers Association (ABA) who argued that stablecoin yields are a “detriment” to banks who are trying to support their community.

“This is about ensuring banks continue to be in a position to support their communities and power the economy,” said ABA’s senior vice president of innovation and strategy, Brook Ybarra.

She added that “a detriment to that would be allowing the likes of Coinbase and Kraken to pay interest on payment stablecoins.”

Ybarra then said that doing so would “fly in the face” of the notion around a payment stablecoin “that it should be a means of payment and not a store of value.”  

ABA senior vice president and executive director Jess Sharp was on stage with Ybarra and agreed with her comments, adding that the issue is not “about what’s good for banks,” but rather “what’s good for communities.”

“Banks take the deposits and convert them into loans,” he said. “Fewer deposits mean fewer loans, and most members of Congress understand that that’s not a good thing.”

He added that those members of Congress will “not want to do damage to the communities that they serve.”

“Detriment To Who?” Asks Ripley

While the ABA senior executives argue that stablecoin yields could negatively impact banks’ ability to support communities, Ripley questioned if there is an ulterior motive behind their remarks. 

He said on X that stablecoins will lead to healthy competition in the financial space, adding that “healthy competition is the bedrock of a free market and free markets benefit actual consumers and businesses.” 

This panel hosted by the American Bankers Association said allowing companies like @krakenfx or @coinbase to pay interest on stablecoins would be “a detriment.”

A detriment to who?

Healthy competition is the bedrock of a free market and free markets benefit actual consumers…

— Dave Ripley (@DavidLRipley) October 21, 2025

“Consumers should have the freedom to choose where they hold value and the most efficient way to send that value,” he added. 

He acknowledged that there are “regulatory moats” that were built to “enrich the companies that form them,” and added that he isn’t surprised that the ABAis trying to prevent stablecoin issuers from offering yields to token holders. 

“Banks want to preserve their position and keep earning fees on client assets without passing the benefit back to the people who own them,” he said.

Stablecoin Issuers Currently Prohibited From Offering Direct Yields To Holders

Stablecoin issuers are currently not allowed to offer their token holders yields directly under the GENIUS Act, which was signed into law in July by US President Donald Trump.

However, the ban is not extended to third party service providers or affiliates. For example, Coinbase currently offers yields of 3.85% on Circle’s USD Coin (USDC).

Coinbase offers 3.85% on USDC holdings (Source: Coinbase)

The yield on stablecoins offered by Coinbase and other crypto exchanges is much higher than the 0.6% average offered by US national savings accounts. 

Banking trade associations such as the American Bankers Association (ABA), Bank Policy Institute (BPI) and the Consumer Bankers Association are therefore lobbying Congress and regulators to close what they call a “loophole” that allows stablecoin firms to get around offering yields to token holders. 

Their concerns follow an estimate by the US Treasury Department that stablecoin adoption could lead to as much as $6.6 trillion in deposits shifting out of banks. 

Stablecoin Issuers Could Soon Plug Into The Fed’s Infrastructure

Amid the concerns that stablecoins could trigger massive outflows from banks, the US Federal Reserve recently signaled its intention to embrace innovative technologies such as stablecoins and AI in the payments space.

Speaking at the central bank’s inaugural Payments Innovation Conference, Governor Christopher Waller said the Fed is considering giving “eligible” stablecoin firms access to its payments infrastructure. 

He pitched the idea of a “skinny” master account, which would give the firms restricted access to the Fed’s infrastructure. 

“The idea is to tailor the services of these new accounts to the needs of these firms and the risks they present to the Federal Reserve Banks and the payment system,” Waller explained during his speech.”

“Accordingly, and importantly, these lower-risk payment accounts would have a streamlined timeline for review,” he added. 

That could accelerate the approval process for crypto-native firms such as Ripple, Kraken and Custodia Bank, who are all pursuing Fed master accounts through lengthy legal processes. 

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