David Ripley, chief executive of U.S. crypto exchange Kraken, has pushed back against the American Bankers Association (ABA) after a senior executive claimed that paying yields on stablecoins would undermine the role of traditional banks. The exchange of words highlights growing friction between the crypto sector and banking institutions as stablecoins move closer to mainstream finance.
Speaking at the ABA’s annual convention, the association’s senior vice president of innovation and strategy, Brooke Ybarra, argued that allowing major exchanges such as Kraken or Coinbase to pay interest on payment stablecoins would “fly in the face” of their intended use as payment tools rather than stores of value. She stated that such practices would harm banks’ ability to “support their communities.”
Ripley dismissed that view, questioning the impact. “A detriment to who?” he asked. “Consumers should have the freedom to choose where they hold value and the most efficient way to send that value.”
Kraken’s Argument: “We’re Building Something Else”
Ripley accused traditional banks of profiting from customer deposits without adequately passing on the benefits to their customers. He articulated Kraken's mission, stating, “We are building toward something else — a system where services once reserved for the wealthy are accessible to everyone.” His remarks come amid a notable difference in yields, with stablecoin yields on some platforms reaching up to 5%, a figure significantly higher than the U.S. average savings rate of 0.6% and top high-yield offers near 4%, according to Bankrate.
Other figures within the cryptocurrency sector have voiced support for Ripley’s criticism. Dan Spuller, head of industry affairs at the Blockchain Association, commented, “Big banks are ruthlessly targeting our friends at @Coinbase and @KrakenFX to protect their turf.” He later elaborated on this sentiment, stating, “Translation: competition’s winning.”
Developers and users in the crypto community have echoed this sentiment across social media platforms. For instance, Solana developer Voss wrote, “Bring on the competition, it’s a capitalist world anyway.”
Stablecoins and the GENIUS Act
This ongoing debate occurs just months after U.S. President Donald Trump signed the GENIUS Act. This long-awaited regulatory framework is designed to provide legal clarity for stablecoins. The act permits qualified issuers to hold reserves in short-term U.S. Treasuries and to offer limited yield-bearing products, provided they operate under federal oversight. The implementation of this law has generated optimism within the cryptocurrency industry, suggesting that stablecoins could soon assume a more significant role in payment systems and digital finance.
Analysts suggest that the potential for yield-bearing stablecoins poses a challenge to the traditional deposit base of banks. Some stablecoin issuers and exchanges are reportedly already testing tokenized cash instruments that function similarly to digital money market funds. This model has the potential to redirect deposits away from commercial banks and towards regulated crypto platforms.
TradFi vs. Crypto: A Global Tension
The current dispute between Kraken and the ABA is indicative of a broader global pattern of tension between traditional finance (TradFi) and the cryptocurrency sector. In June, Diogo Mónica, general partner at Haun Ventures, highlighted that many stablecoins are backed by reserves held in globally systemic banks or U.S. Treasury bills, assets he characterized as being “safer than commercial bank deposits.”
Beyond the U.S., cryptocurrency exchanges continue to report facing banking restrictions. A survey conducted by Binance Australia revealed that local users still encounter barriers when attempting to transfer funds between banks and crypto exchanges. Matt Poblocki, general manager for Binance in Australia and New Zealand, stated that restricted access to financial rails “directly affects participation, confidence and trust in the market.” He further noted that such constraints hinder adoption and impede market growth.