Apart from her mortgage, my mother never paid a penny of interest. This was in the sixties, seventies, and eighties when consumers carried multiple native retailer credit cards. She paid off the balance of every card every month. She felt her money should be a source of income (interest from a bank) as opposed to a cost expense, interest paid to a credit card issuer.
If she were still alive, she would be aghast, shocked, and probably slap me if she knew I had put money into USDC (Oh, how I failed). US stable doesn't pay interest; the funds sit idle without earning anything. To a woman who avoided paying consumer interest because she preferred making money on her money, stable would be a non-starter.
The arguments for stablecoins, like ease of payments and atomic settlement, would not sway her. Talk about stablecoins "being the future", nope.
She would probably conclude that the crypto industry (and me) had lost common sense regarding money. Sure, stable coins provide on and off ramps to crypto investments, but most people still run a balance that is not paying interest. A non-interest earning balance may be small and for a short amount of time, but it is still a non-earning asset.
It gets worse. Interest is paid on the paper backing stable (USTs) is paid to the issuer. I assert issuers would love to pay that money to holders, but they cannot.
Regulation through the Genius or Clarity Act could correct this injustice, but banks are doing their best to hinder it. The ABA (American Bankers Association) claims that paying interest on stable coins could drain deposits from community banks and sharply increase funding costs. Capital flight would likely tighten local credit markets and disrupt small business lending as digital assets scale.
Instead of begging for protectionism, why don't the banks just admit that "if you can't beat them, join then". Bank issued yield-bearing stable might have had a chance of acceptance by my mother. Not a big chance, but a chance, nonetheless.
There is a better way—Etherfuse bonds. Etherfuse offers tokenized short-term sovereign bonds in Mexico, Brazil, US, UK, South Korea, and soon to be Kazakhstan. Short-term makes them like a yield bearing account. Tokenized means they can be used for generating crypto yield and as collateral.
They make more sense than non-interest-bearing stablecoins. Even my mother might agree.
This blog is for educational and informational purposes only, covering general market trends, industry developments, and asset features. Nothing herein is investment advice, a solicitation, or a recommendation to buy or sell any assets. Etherfuse and its guests may hold stakes in some or all of the assets discussed.
