A new dispute has emerged between U.S. banks and crypto firms after comments about stablecoin interest products sparked public criticism from Kraken’s chief executive.
The ongoing rivalry between banks and crypto platforms took another turn this week as Kraken’s chief executive officer David Ripley pushed back against the American Bankers Association’s warning on stablecoin interest products.
Ripley responded via an Oct. 22 post on X after the association’s senior vice president, Brooke Ybarra, said during the ABA Annual Convention that letting exchanges like Kraken pay interest on stablecoins would be “a detriment” to traditional banks.
Ybarra said stablecoin yields, some reaching up to 5%, could draw large sums away from the banking system, noting that they surpass the U.S. national savings rate of 0.6% and typical high-yield accounts at around 4%.
The Treasury Borrowing Advisory Committee estimated that as much as $6.6 trillion could shift from deposits to stablecoins if such products become widely available.
In her remarks, Ybarra argued that interest-bearing stablecoins could undermine banks’ role in community lending and financial stability.
Ripley dismissed the ABA’s stance as “moat building,” saying it protects bank profits at the expense of consumer choice. He wrote that healthy competition strengthens markets and that customers should be free to decide where and how to hold value.
He added that Kraken is working to make financial tools once limited to the wealthy accessible to everyone.
Dan Spuller, the Blockchain Association’s head of industry affairs, echoed Ripley’s view, accusing banks of trying to block innovation and preserve their long-standing advantages.
The debate follows the GENIUS Act, enacted earlier this year, which established new stablecoin rules in the U.S. The law bars direct interest payments but allows exchanges to offer “rewards” to holders.
Coinbase CEO Brian Armstrong has also urged regulators to adopt policies that treat crypto yield products fairly alongside bank offerings. Some analysts note that most stablecoins are backed by short-term U.S. Treasuries or bank reserves, giving them a security profile similar to traditional deposits.
Ripley’s comments reflect a growing divide between regulated crypto firms and legacy finance over who should control the flow of digital money.
