Kraken CEO Dave Ripley has directly addressed a senior executive from the American Bankers Association (ABA) who claimed that stablecoin yields are a "detriment" to banks' ability to support their communities.
Brook Ybarra, the ABA's senior vice president of innovation and strategy, stated, "This is about ensuring banks continue to be in a position to support their communities and power the economy." She further argued that "a detriment to that would be allowing the likes of Coinbase and Kraken to pay interest on payment stablecoins."
Ybarra added that such actions would "fly in the face" of the concept of a payment stablecoin, suggesting it should function as a means of payment rather than a store of value.
Jess Sharp, ABA's senior vice president and executive director, who was on stage with Ybarra, concurred. He emphasized that the concern is not solely about what benefits banks but rather "what's good for communities."
"Banks take the deposits and convert them into loans," Sharp explained. "Fewer deposits mean fewer loans, and most members of Congress understand that that's not a good thing."
He continued, stating that these members of Congress "will not want to do damage to the communities that they serve."
"Detriment To Who?" Questions Ripley
Ripley challenged the ABA's perspective, questioning the underlying motives behind their assertion that stablecoin yields could negatively impact banks' community support. He posited that stablecoins foster healthy competition within the financial sector.
"Healthy competition is the bedrock of a free market, and free markets benefit actual consumers and businesses," Ripley stated on X.
This panel hosted by the American Bankers Association said allowing companies like @krakenfx or @coinbase to pay interest on stablecoins would be “a detriment.”
A detriment to who?
Healthy competition is the bedrock of a free market and free markets benefit actual consumers…
— Dave Ripley (@DavidLRipley) October 21, 2025
He further elaborated, "Consumers should have the freedom to choose where they hold value and the most efficient way to send that value."
Ripley acknowledged the existence of "regulatory moats" designed to "enrich the companies that form them." He expressed no surprise that the ABA is attempting to prevent stablecoin issuers from providing yields to token holders.
"Banks want to preserve their position and keep earning fees on client assets without passing the benefit back to the people who own them," Ripley asserted.
Stablecoin Issuers Currently Prohibited From Offering Direct Yields To Holders
Under the GENIUS Act, signed into law by US President Donald Trump in July, stablecoin issuers are currently prohibited from directly offering yields to their token holders.
However, this restriction does not extend to third-party service providers or affiliates. For instance, Coinbase currently offers a yield of 3.85% on Circle's USD Coin (USDC).

The yield offered by Coinbase and other crypto exchanges on stablecoins significantly surpasses the average 0.6% offered by US national savings accounts.
Consequently, banking trade associations such as the American Bankers Association (ABA), Bank Policy Institute (BPI), and the Consumer Bankers Association are actively lobbying Congress and regulators to address what they term a "loophole" that permits stablecoin firms to circumvent offering yields directly to token holders.
These concerns are amplified by an estimate from the US Treasury Department suggesting that stablecoin adoption could lead to a shift of up to $6.6 trillion in deposits away from traditional banks.
Stablecoin Issuers Could Soon Plug Into The Fed’s Infrastructure
Amidst the concerns about potential massive deposit outflows from banks due to stablecoins, the US Federal Reserve has recently indicated its openness to embracing innovative technologies like stablecoins and AI within the payments landscape.
During the central bank's inaugural Payments Innovation Conference, Governor Christopher Waller stated that the Fed is considering granting "eligible" stablecoin firms access to its payments infrastructure.
He proposed the concept of a "skinny" master account, which would provide these firms with restricted access to the Fed's infrastructure.
"The idea is to tailor the services of these new accounts to the needs of these firms and the risks they present to the Federal Reserve Banks and the payment system," Waller explained in his speech.
"Accordingly, and importantly, these lower-risk payment accounts would have a streamlined timeline for review," he added.
This development could potentially expedite the approval process for crypto-native firms such as Ripple, Kraken, and Custodia Bank, all of whom are pursuing Fed master accounts through lengthy legal channels.

