Columbia Business School Debunks 5 Stablecoin Myths Stalling US Crypto Reform

Omid Malekan, an adjunct professor at Columbia Business School, argues that US crypto reform is being stalled by five persistent, unsubstantiated myths surrounding stablecoins, particularly concerning their impact on the banking system. Myth 1 claims stablecoins shrink bank deposits; Malekan counters that foreign demand and reserve management actually increase domestic deposits. Myth 2 suggests stablecoins threaten bank credit supply, which he refutes by stating large banks have ample reserves and can adjust lending capacity. Myth 3, that banks need protection from competition, is countered by data showing non-bank lenders provide the majority of US credit. Furthermore, Myth 4, that community banks are most at risk, is false, as large money center banks face the real competitive pressure. Finally, Myth 5, prioritizing borrowers over savers, is flawed, as rewarding stablecoin holders (savers) strengthens overall economic stability. Malekan concludes that these fears, often pushed by lobbying, are unproven and hinder progress on legislation like the Digital Asset Market Clarity Act, urging policymakers to focus on evidence.

(Source：BeInCrypto)