Crypto World
China exports miss estimates in March, imports post best growth in more than four years
A cargo ship loaded with foreign trade containers sails towards the open sea in Jiaozhou Bay, Qingdao, Shandong, China, on April 13, 2026.
Costfoto | Nurphoto | Getty Images
China’s export growth slowed in March as manufacturers grappled with surging commodity and energy costs due to the Middle East conflict disrupting supplies, while imports logged the strongest growth in more than four years.
Exports grew at their slowest pace in six months at 2.5% in U.S. dollar terms last month from a year earlier, Chinese customs data showed Wednesday, missing Reuters-polled analysts’ median estimate for a 8.6% growth, and weakening from the combined 21.8% surge in the first two months of the year.
Imports surged 27.8% in March from a year ago, marking the strongest growth since November 2021, sharply beating expectations for a 11.2% growth, and quickening from 19.8% in the prior two months.
China releases combined trade data for January and February due to fluctuations around the Lunar New Year, the country’s biggest holiday, which follows the agrarian calendar.
The world’s second-largest economy has remained reliant on trade for its growth despite rising tensions with the U.S. and higher tariffs. Net exports accounted for about a third of China’s economy last year.
While Beijing’s strategic oil stockpiles, a diversified energy mix, and tight price controls have cushioned the blow from surging oil prices, the export-reliant economy remains vulnerable to a global economic downturn resulting from a prolonged closure of the Strait of Hormuz.
In a press briefing on Tuesday, Wang Jun, China’s customs vice minister, said that global oil prices have experienced “fierce fluctuation,” creating a “complex and severe” trade environment.
Higher commodity and energy prices stemming from the conflict have started feeding into Chinese manufacturers’ input costs, threatening to weigh on firms’ already thin margins. Factory-gate prices in the country rose by 0.5% in March, climbing for the first time in more than three years.
However, the consumer price index rose by a slower-than-expected 1% from a year ago, as domestic demand remained under pressure.
The country is due to report its first-quarter gross domestic product on Thursday. Analysts polled by Reuters estimate a 4.8% increase, compared to a 3-year low of 4.5% in the fourth quarter of 2025.
Key Points
- Criminal organization demands payment from Kraken after obtaining video recordings of the exchange’s internal operations
- Chief Security Officer Nick Percoco states no system compromise occurred and all customer assets remain secure
- Approximately 2,000 user accounts may have been accessed during two distinct events in February 2025 and recently
- Federal authorities are collaborating with Kraken on the investigation, with one extortion scheme already neutralized
- Similar incident targeted Coinbase in May 2025, demanding $20 million following compromise of approximately 70,000 customer records
The cryptocurrency exchange Kraken has publicly declined to meet the demands of cybercriminals who captured video recordings of its internal operational systems and are threatening public disclosure. Nick Percoco, serving as the platform’s Chief Security Officer, announced the company’s position via X on Monday.
According to Percoco, the perpetrators recorded Kraken’s customer support personnel while they accessed internal client management platforms. This footage is now being weaponized to extract an undisclosed sum from the exchange.
“We will not pay these criminals,” Percoco declared. “We will not ever negotiate with bad actors.”
The exchange has verified that no complete system penetration took place. At no time were customer assets placed in jeopardy during either occurrence.
Two distinct security events form the foundation of this extortion campaign. The initial incident transpired in February 2025, when evidence suggests a Kraken support staff member recorded internal platform activities. A subsequent incident following a comparable methodology occurred more recently.
In each situation, Kraken responded swiftly to recognize the security risk and terminate unauthorized access. The platform reports successfully dismantling one extortion scheme tied to this criminal activity.
Approximately 2,000 customer accounts on Kraken’s platform were potentially accessed throughout both security incidents. The exchange has initiated contact with all potentially impacted users.
Federal Authorities Join Investigation
Kraken has engaged federal law enforcement agencies to pursue the criminal organization. Percoco indicated the ongoing investigation may result in apprehensions.
The platform is additionally coordinating with cybersecurity specialists across the industry. Percoco stated the organization is partnering to “investigate and disrupt insider recruitment efforts” focused on cryptocurrency, gaming, and telecommunications sectors.
Internal security risks have emerged as an escalating challenge throughout the digital currency ecosystem. The North Korean-linked Lazarus Group has gained notoriety for infiltrating operatives within legitimate organizations, with security researchers documenting no fewer than 60 identified Lazarus-connected developers working for cryptocurrency ventures.
Coinbase Experienced Comparable Extortion Scheme
Kraken isn’t the inaugural prominent exchange confronting this type of criminal pressure. During May 2025, Coinbase revealed that cybercriminals demanded $20 million to prevent the release of customer information.
That security incident impacted approximately 70,000 platform users and stemmed from corruption payments made to international customer support personnel.
Overall cryptocurrency security incidents have demonstrated an upward trajectory. Blockchain intelligence provider Nominis reports that more than $178 million vanished through significant crypto-related attacks during March 2026, representing a substantial increase from $49.3 million recorded in February.
Authorization exploitation emerged as the predominant attack vector throughout March, with targets inadvertently approving transactions that granted attackers complete control over their digital assets.
Percoco emphasized that protecting Kraken’s customers remains the platform’s “highest priority” and affirmed ongoing efforts to strengthen defenses against evolving security challenges.
Bitmine Immersion Technologies has pushed its Ethereum (ETH) exposure to new highs. The firm’s holdings surpassed 4% of the total ETH supply as it accelerates its accumulation strategy.
In its latest update, the company revealed it acquired 71,524 ETH over the past week, its “highest pace of buys since the week of December 22, 2025.”
Bitmine Moves Closer to Its 5% ETH Supply Target After Latest Buy
The latest buy brings Bitmine’s total holdings to approximately 4.87 million ETH. This puts it roughly 81% of the way toward its “Alchemy of 5%” target, nine months after launching its ETH treasury strategy.
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Beyond Ethereum, Bitmine’s broader balance sheet reflects a diversified portfolio. The company currently holds 198 Bitcoin, alongside equity stakes valued at $200 million in Beast Industries and $85 million in Eightco Holdings. It also reported cash reserves of approximately $719 million.
Tom Lee Frames Ethereum as Wartime Safe Haven
Bitmine Chairman Thomas Lee argued that Ethereum has emerged as a standout performer over the past few weeks. He noted that ETH has gained 17.4% since the onset of the ongoing geopolitical conflict.
The second-largest cryptocurrency has outperformed the S&P 500 by 1,830 basis points and surpassed gold by 2,743 basis points. This performance, in his view, positions ETH as a “wartime store of value.”
“Ethereum continues to benefit from the dual tailwinds of Wall Street tokenizing on the blockchain and from agentic AI systems increasingly needing public and neutral blockchains,” Lee added.
Meanwhile, the latest accumulation comes amid a broader rebound in risk assets. Ethereum climbed more than 7% over the past 24 hours to trade near $2,369.7, as market sentiment improved following developments tied to the US Hormuz blockade.
Shares of Bitmine (BMNR) also reacted positively. BMNR closed more than 4% higher, with additional gains of around 1% in after-hours trading. However, despite the recent price recovery, Bitmine’s aggressive positioning still carries significant downside.
The firm’s crypto holdings remain underwater, with unrealized losses exceeding $6 billion, highlighting the volatility tied to its high-conviction bet on Ethereum.
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The post Bitmine’s Ethereum Holdings Cross 4% Milestone After Latest Weekly Accumulation appeared first on BeInCrypto.
Crypto World
Senator Tillis eyes “crypto-palooza” to break stalemate over stablecoin yield regulations
A bipartisan effort to bridge the divide between Wall Street and the digital asset industry could see a breakthrough as early as this week.
Summary
- Senator Thom Tillis plans to release a draft agreement this week aimed at resolving the dispute between banks and crypto firms over stablecoin interest payments.
- The proposed language for the Clarity Act seeks to settle whether digital asset companies can offer rewards on idle balances after banks voiced concerns regarding deposit drains.
Politico reports that Senator Thom Tillis (R-N.C.) is preparing to unveil a draft agreement aimed at settling the fierce debate over stablecoin yields.
Working alongside Senator Angela Alsobrooks (D-Md.), Tillis has been refining language for the Clarity Act, a piece of legislation intended to set a regulatory framework for the crypto sector.
The primary sticking point remains whether digital asset firms should be permitted to pay interest on idle stablecoin balances, a practice banks claim threatens their deposit base.
“I think the language has come together well,” Tillis stated on Monday, noting that a public release depends on the continued success of ongoing discussions.
Banking representatives have already expressed concerns regarding the latest proposal from the two senators. Traditional lenders argue that high-yield stablecoin products could pull liquidity out of the banking system, creating instability.
Conversely, crypto platforms like Coinbase argue that a ban on rewards would hinder growth and ignore the potential for banks to participate in these new markets.
While the GENIUS Act, passed last year, prohibited stablecoin issuers from paying interest directly, it left a loophole for third-party exchanges to offer yields, which the Clarity Act now seeks to address.
The White House has attempted to mediate the standoff through several private meetings since January, yet both sides have remained firm in their views.
Senator Tillis has suggested hosting a “crypto-palooza” on Capitol Hill, bringing both factions together in a public forum to force a resolution.
Even if a compromise is reached, the bill faces a steep climb through the Senate Banking and Agriculture Committees before it can reach the floor for a final vote.
Zero-knowledge scaling company StarkWare is cutting jobs and restructuring its operations as it shifts from infrastructure development toward revenue-generating products.
CEO Eli Ben-Sasson said in internal remarks that the firm will split into two business units and cut headcount to move faster and operate more efficiently, with one unit focused on applications and the other on Starknet development.
Ben-Sasson said the company would adopt a “startup mode” mindset, prioritizing fewer initiatives with higher revenue potential, while warning that downsizing would affect employees across the organization. StarkWare did not disclose how many employees would be affected by the cuts.
The move reflects a wider retrenchment across crypto firms, which have been trimming headcount and narrowing priorities as they chase clearer product-market fit, stronger monetization and leaner operations. Messari, Algorand Foundation and Crypto.com all announced cuts in March.
StarkWare says technical edge must translate into revenue
Ben-Sasson said StarkWare’s next phase would center on turning its technology into “meaningful revenue” and “meaningful usage,” arguing that the company could no longer rely mainly on external blockchains or third-party teams to prove the value of its stack.
Ben-Sasson said the company would focus on “fewer things excellently” and prioritize products with revenue potential that can be built only on its technological stack.
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“We’re going to achieve this by innovating across not just infrastructure, as we’ve done so far, but across the whole stack of infrastructure and product,” he said.
Crypto layoffs continue as firms tighten strategy
StarkWare’s cuts follow other recent layoffs across the crypto sector as firms narrow priorities and reshape operations. On March 17, Messari announced layoffs alongside a leadership change as the company moved deeper into artificial intelligence-powered research and data tools for institutions.
On March 19, the Algorand Foundation said it would cut 25% of its employees, citing macro uncertainty and the broader crypto downturn. The organization said the move was aimed at better aligning resources with its long-term business, technology and ecosystem priorities.
On the same day, Crypto.com also announced a 12% reduction of its workforce as part of a broader push into AI. The exchange said the layoffs were tied to company-wide AI integration and a decision to prioritize resources around key growth areas.
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The U.S. Department of Justice has opened a compensation process for victims of the OneCoin crypto Ponzi scheme, drawing from forfeited assets seized from the operation’s principals. The department announced that more than $40 million in recovered assets is available to reimburse individuals who bought OneCoin between 2014 and 2019 and recorded a net loss.
US Attorney for Manhattan Jay Clayton called the program “an important step toward returning funds to those harmed.” The case highlights how large-scale crypto fraud can unfold and how authorities are attempting to recoup proceeds for victims, even years after a scheme collapses.
OneCoin, launched in 2014 with the ambition of rivaling Bitcoin, rapidly gained attention before revelations of its lack of real utility led to a global crackdown. The project rose to prominence in the crypto market, only to fall as authorities worldwide launched investigations into its operations.
“Between 2014 and 2019, OneCoin’s founders sold a lie disguised as cryptocurrency, costing victims more than $4 billion worldwide,” Clayton said. “While no recovery can fully undo the damage, our Office will continue working to seize criminal proceeds and prioritize getting money back into the hands of victims.”
Key takeaways
- The Department of Justice has established a compensation process for OneCoin victims, drawing on more than $40 million in forfeited assets.
- Eligible claimants are individuals who purchased OneCoin between 2014 and 2019 and sustained a net loss.
- OneCoin’s co-founders were Ruja Ignatova and Karl Sebastian Greenwood; Greenwood has since been sentenced to 20 years in prison, while Ignatova remains at large despite ongoing efforts to locate her.
- Authorities estimate that the scheme stole more than $4 billion from about 3.5 million victims between 2014 and 2016, with some broader estimates suggesting global losses could reach as high as $19 billion.
- Before its collapse, several central banks warned investors about OneCoin, and Bulgarian police later raided the company’s headquarters in 2018, resulting in Greenwood’s arrest.
The OneCoin arc: from promise to collapse
OneCoin launched in Bulgaria in 2014, spearheaded by Ruja Ignatova and Karl Greenwood, and quickly spread to the United States around 2015. The DOJ notes that the operation quickly attracted millions of participants, convincing many that they were investing in a legitimate alternative to established cryptocurrencies.
Despite its spectacular rise, investigators uncovered that the coin did not possess real value or functional utility beyond the marketing and pyramid-like incentives that fueled its expansion. By the time authorities moved in, the scheme had already exhausted substantial sums from a wide global base of investors.
According to the DOJ, between 2014 and the end of 2016, the scheme stole more than $4 billion from roughly 3.5 million victims. Some external estimates have placed global losses significantly higher, underscoring the scale and reach of the fraud as it unfolded across borders.
Prior to its collapse, several national central banks publicly warned investors about OneCoin, labeling it as a potential Ponzi scheme. The investigation culminated in Bulgarian police raids on the company’s headquarters in 2018, and Greenwood was subsequently arrested.
Greenwood’s prosecution culminated in a 20-year prison sentence handed down in September 2023 for his role in the scheme. Ignatova’s whereabouts remain unknown since 2017 when she was last seen boarding a flight to Athens. The FBI lists Ignatova on its Ten Most Wanted Fugitives list, and authorities have offered a $5 million reward for information leading to her capture and conviction.
The OneCoin case remains a stark reminder of how quickly crypto investment narratives can diverge from real utility, and how enforcement authorities pursue asset recovery even after schemes collapse.
Implications for victims and the broader crypto landscape
The new compensation process represents a tangible step by the U.S. government to translate enforcement outcomes into restitution for ordinary investors who were harmed by a high-profile crypto fraud. While the $40 million pool cannot fully compensate billions in alleged losses, it signals a channel for victims to recover at least a portion of their losses, funded from confiscated assets rather than taxpayer money.
For investors and practitioners, the OneCoin episode underscores several enduring lessons about risk in crypto markets. First, the presence of rapid wealth narratives around “cryptocurrency” does not guarantee legitimate value creation. Second, cross-border enforcement can eventually converge on asset recovery, even when the underlying assets prove illiquid or non-existent in utility terms. Finally, the case adds to the growing jurisprudence around what constitutes a legitimate crypto asset and how regulators differentiate between genuine innovation and deceptive schemes.
As authorities continue to unwind the remaining legal and financial tail of OneCoin, observers will be looking for updates on additional forfeitures, the effectiveness of the compensation framework, and how such processes could influence future cases involving mass-market crypto schemes.
For readers tracking this story, the next milestones to watch include the administration of the compensation process, any further asset seizures tied to the case, and ongoing efforts to locate Ignatova or recover further proceeds linked to the scheme.
Crypto World
Former CFTC Chair Chris Giancarlo leaves Willkie Farr to focus on digital asset advisory
Former CFTC Chairman Chris Giancarlo is leaving the legal profession to commit himself fully to the digital asset space as a strategic adviser for fintech and cryptocurrency startups.
Summary
- Chris Giancarlo is retiring from legal practice at Willkie Farr & Gallagher to focus exclusively on advising cryptocurrency founders and fintech boards.
- The former regulator earned the nickname Crypto Dad during his time leading the CFTC for his early support of digital assets and his role in launching the first Bitcoin futures.
The announcement came via a social media post on Sunday, where Giancarlo confirmed his departure from the law firm Willkie Farr & Gallagher and his official retirement from legal practice.
By moving into a full-time advisory role, he plans to provide guidance to executives and boards navigating the evolving digital economy.
“From here on, I’ll devote my time to advising founders & builders of FinTech & Digital Assets and their CEOs and boards, research & writing on public policy issues, and continuing work with non-profit programs,” Giancarlo stated.
Known throughout the industry as “Crypto Dad,” Giancarlo earned his reputation during his tenure at the Commodity Futures Trading Commission.
He joined the agency as a commissioner in 2014 under the Obama administration and later served as chairman from 2017 to 2018 following a nomination by Donald Trump.
His leadership was defined by the pivotal decision to greenlight the first Bitcoin futures markets in the United States, a move that helped bridge the gap between traditional finance and nascent digital markets.
Giancarlo has remained a prominent figure in regulatory circles since leaving public office, recently working with the crypto-focused bank Sygnum on global strategy and compliance.
During a recent appearance on “The Wolf of All Streets” podcast, he addressed the slow pace of legislative efforts like the CLARITY Act.
He suggested that even without immediate action from Congress, the CFTC and the SEC possess the necessary tools to establish a functional framework for the industry.
Modernizing the financial system remains a priority for the former regulator. He warned that while regulatory uncertainty might cause traditional banks to hesitate, the underlying tech is too important to ignore.
“I think there’s a recognition that this is the new architecture of finance and America, our financial institutions are the world’s dominant financial institutions. We need to modernize that. We need to adopt this technology,” he said.
The transition follows a similar path taken by other high-ranking regulators. Caroline Pham, who previously served as the acting chair of the CFTC, moved into the private sector last December to take on the role of chief legal officer at MoonPay.
Citadel Securities believes the worst-case tail risk from the Iran conflict has been “substantially truncated,” positioning both stocks and bonds for a rally.
The view, outlined by Nohshad Shah, reflects easing extreme-scenario risks as geopolitical incentives increasingly favor de-escalation.
Rally in Stocks and Bonds Is Coming as War Tail Risks Shrink
Shah wrote in a note that Iran’s leadership is primarily focused on regime survival. At the same time, China has strong incentives to push for de-escalation. Together, these dynamics suggest the likelihood of further military escalation is fading.
“The contours of what follows will become clearer in the coming weeks, but for markets, the most relevant point is that we appear to have substantially truncated the tail of the worst-case scenario,” he said.
Despite the US-led Hormuz blockade, Shah maintains his view that a resolution is taking shape. He suggested the conflict’s “end game” is approaching as both Washington and Tehran face rising costs from prolonged hostilities.
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US equity markets appeared to agree with that assessment. Google Finance data showed that the S&P 500 climbed 1.02% on Monday, rising to 6,886. The index has erased nearly all its losses since the Iran war began in late February.
The Nasdaq Composite gained 1.23%, the Russell 2000 Index rose 1.5%, and the Dow Jones Industrial Average added 0.6%. The rally extended gains from last week, when the S&P 500 recorded its longest winning streak since October 2025.
Previously, BitMine’s chairman, Tom Lee, also projected that the stock market had bottomed and the index could hit record highs this year.
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The post Citadel Securities Expects Stocks and Bonds to Rally: Here’s Why appeared first on BeInCrypto.
X Head of Product Nikita Bier suggested the platform could launch a crypto-focused product, posting that “crypto has had a rough year” and that X should “launch something to fix it.”
While nothing has been officially confirmed, the post quickly drew responses from prominent community members pitching specific integration ideas. Fred Krueger responded to Bier’s post, calling for native Bitcoin (BTC) support on X.
Another user argued that paying creators in USDC stablecoin would improve the experience for both content producers and the platform.
These responses reflect a growing appetite among X’s crypto-native user base for deeper digital asset functionality.
Smart Cashtags and Trading Infrastructure
X has already taken concrete steps toward crypto-adjacent features. On February 14, Bier announced Smart Cashtags. This tool would let users trade stocks and crypto directly from the X timeline. The feature builds on X’s existing cashtag indexing system.
Previously, there was growing speculation that crypto functionality could be integrated into the X Money service, but the platform has not yet confirmed any such plans.
Furthermore, X appointed Benji Taylor as its new Design Lead in March. Taylor previously served as Chief Product Officer at Aave Labs and as the lead designer at Coinbase’s Base network.
His blockchain-heavy background has been widely interpreted as a signal that X is preparing to integrate crypto more deeply into its product stack.
Whether Bier’s post was a genuine product tease or simply community engagement, the convergence of Smart Cashtags, Taylor’s hire, and X Money’s development suggests the platform’s crypto ambitions may be advancing on multiple fronts.
The post X Head of Product Teases New Launch to Address Crypto’s Rough Year appeared first on BeInCrypto.
Key Takeaways
- BTC reached a four-week peak approaching $75,000 before settling around $74,290
- Approximately $530 million in cryptocurrency liquidations occurred, predominantly affecting short sellers at 80%
- Optimism surrounding potential US-Iran diplomatic progress is viewed as the primary catalyst
- Spot Bitcoin ETFs recorded $833 million in net capital inflows over the previous week
- Large wallet addresses accumulated 30,000 BTC throughout March, representing approximately $2.1 billion
Bitcoin successfully breached the $73,000 threshold on Monday after three previous rejection attempts over the preceding eight days, climbing to $74,484 — marking its strongest performance since the Iran tensions escalated in late February.
This price movement resulted in $534 million worth of forced liquidations affecting approximately 180,000 market participants. Short positions accounted for $430 million of these liquidations, representing the second substantial short squeeze within a six-day period.
Ethereum demonstrated stronger performance than Bitcoin, climbing 7.7% to $2,366 — reaching levels not seen in approximately ten weeks. Solana advanced 4.6%, while BNB increased 3.3%. All top-10 cryptocurrency assets by market capitalization recorded positive movements across both 24-hour and seven-day timeframes.
The most significant individual liquidation involved a $12.4 million BTC-USDT short position on the Aster exchange. Bitcoin represented $229 million in aggregate liquidations, with Ethereum following at $136 million.
Market participants are attributing the upward movement to indications from President Trump suggesting potential willingness to re-engage in diplomatic discussions with Iran. Despite a US military blockade of the Strait of Hormuz commencing Monday, financial markets appear to interpret this as a negotiating tactic rather than military escalation.
Jeff Mei, COO at BTSE, shared with Cointelegraph: “Market participants believe the US and Iran are progressing toward an agreement. Iran is urgently seeking to negotiate a settlement, and equity and cryptocurrency markets are responding positively.”
The S&P 500 has completely recovered all declines stemming from the Iran conflict, while the MSCI All Country World Index extended its winning streak to eight consecutive sessions.
Institutional Investment and Large Holder Behavior
Bitcoin ETFs captured $833 million in net positive flows throughout the past week. James Butterfill from CoinShares indicated this “demonstrates renewed risk appetite following preliminary ceasefire progress regarding Iran, combined with support from weaker-than-anticipated US consumer spending and inflation figures.”
Blockchain analytics from Santiment reveal that addresses containing between 1,000 and 10,000 BTC increased their holdings by 30,000 tokens during March — valued at roughly $2.1 billion. Approximately 20,000 BTC of this accumulation occurred within a 24-hour window.
The Santiment analytics account highlighted on X that these large holders now possess over 4.25 million BTC, representing 21.3% of circulating supply — their highest concentration since mid-February.
Technical Outlook and Key Levels
Trading organization Valerius Labs observed: “This movement doesn’t constitute a genuine breakout. It’s a short squeeze encountering resistance zones. Authentic demand emerges above the 200-period simple moving average, not 15% beneath it.”
CryptoQuant has identified critical resistance approaching $79,000 — corresponding to the Traders’ Realized Price, where recent participants who entered during the downturn reach their cost basis and may consider profit-taking.
The 4-hour Relative Strength Index has advanced to 62, surpassing its 14-period moving average, which technical analysts interpret as strengthening bullish momentum. The current ceasefire arrangement between the US and Iran is scheduled to conclude next week, with additional diplomatic sessions under consideration.
The American Bankers Association (ABA) has criticized a White House report that claimed banning stablecoin yields would only have a negligible impact on banks, arguing that the conclusion was reached by asking the “wrong question.”
The White House’s Council of Economic Advisers claimed in a research paper on Wednesday, on the “Effects of Stablecoin Yield Prohibition on Bank Lending,” that under a baseline scenario, banning stablecoin yield may only increase bank lending by $2.1 billion, representing a marginal net increase of about 0.02%.
ABA chief economist Sayee Srinivasan and vice president for banking and economic research Yikai Wang said in a statement on Monday that the “live policy concern” is not whether prohibiting yield on stablecoins would impact bank lending but whether allowing yield on stablecoins would encourage deposit outflows, particularly from community banks.
Srinivasan and Wang said that even if total deposits in the banking system remain unchanged, more funds would likely move from smaller banks to large institutions, which would raise the funding costs of community banks and reduce local lending.
Some of these smaller banks may not have enough balance sheet flexibility to absorb these outflows without resorting to higher-cost wholesale borrowing, the pair said.
Members of the crypto and banking industries have met to negotiate provisions in a Senate bill that will outline how crypto is policed ahead of a potential markup this month, with a key sticking point being language around banning stablecoin yield payments.
Related: CFTC chair says agency is ready to oversee entire crypto market
The ABA’s concerns reflect a Treasury paper in April 2025 that estimated widespread stablecoin adoption could lead to $6.6 trillion worth of deposit outflows from the US banking system.
ABA admits stablecoin rewards are more attractive
Despite the fears, the ABA economic researchers acknowledged that households and businesses would be financially incentivized to move funds out of banks in pursuit of higher-paying stablecoins.
Coinbase CEO Brian Armstrong is among the crypto industry leaders who have criticized banks for paying near-zero interest on deposits for decades, arguing that stablecoin yield would force banks to compete on a more level playing field.
The ABA represents some of the banking industry’s biggest names, including JPMorgan Chase, Goldman Sachs and Citigroup.
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