Kraken CEO Pushes Back at Bankers Association Over Stablecoin Interest Criticism
October 22, 2025 — Washington, D.C. — A new dispute has erupted between U.S. banks and cryptocurrency firms following remarks from the American Bankers Association (ABA) opposing interest-bearing stablecoin products. The comments drew sharp criticism from Kraken CEO David Ripley, who accused banks of stifling competition and innovation.
The tension comes as traditional financial institutions and crypto platforms increasingly compete for consumer deposits in a fast-evolving digital finance landscape.
Banks Warn of Deposit Flight
During the ABA Annual Convention, Brooke Ybarra, the association’s Senior Vice President for Innovation Strategy, argued that allowing crypto exchanges like Kraken to offer interest on stablecoins would pose “a detriment” to the banking sector.
Ybarra warned that stablecoin yields—some reaching 5%, well above the U.S. national savings rate of 0.6% and typical high-yield accounts averaging around 4%—could trigger significant outflows from traditional bank deposits.
According to the Treasury Borrowing Advisory Committee, up to $6.6 trillion in deposits could potentially shift into stablecoins if such products were widely introduced. Ybarra said this trend could weaken banks’ ability to support community lending and undermine overall financial stability.
Kraken CEO Fires Back
Kraken’s David Ripley responded on X (formerly Twitter), calling the ABA’s position an attempt to protect bank profits under the guise of consumer protection.
“This isn’t about safety—it’s about moat building,” Ripley wrote. “Healthy competition strengthens markets. People should be free to decide where and how to hold value.”
He emphasized Kraken’s goal of making financial tools—once limited to the wealthy—accessible to everyone, arguing that the crypto industry is simply giving consumers more transparent and efficient alternatives to traditional banking.
Dan Spuller, Head of Industry Affairs at the Blockchain Association, supported Ripley’s stance, accusing banks of “trying to block innovation to preserve their long-standing advantages.”
GENIUS Act Shifts the Landscape
The dispute follows the passage of the GENIUS Act earlier this year, a landmark law creating a federal framework for stablecoin regulation in the United States.
While the Act prohibits direct interest payments on stablecoins, it allows platforms to offer “rewards” to holders—creating a gray area that has reignited debate between traditional and digital financial players.
Coinbase CEO Brian Armstrong has also urged regulators to ensure that crypto yield products are treated fairly compared to traditional savings accounts. Analysts note that most stablecoins are backed by short-term U.S. Treasuries or bank reserves, giving them a similar risk profile to standard bank deposits.
A Growing Divide in Finance
The controversy highlights a widening rift between legacy banks and regulated crypto firms over who will control the next generation of digital money.
Supporters argue that stablecoins improve efficiency, transparency, and inclusion, while critics warn that widespread adoption could destabilize the financial system if not properly regulated.
As Ripley put it, “Consumers deserve choice. The market—not lobbyists—should decide the future of finance.”
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