Kraken CEO Fires Back at Bank Criticism Over Stablecoin Interest

Ybarra, who leads innovation and strategy at the ABA, claimed that interest paid on stablecoins could harm traditional banks.

He argued that crypto platforms like Kraken $679.84M and Coinbase $2.62B should not be allowed to offer interest on stablecoins.

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She said doing so goes against the original purpose of these digital tokens, which are meant for quick payments, not for earning interest like a savings account.

In response, Ripley questioned who exactly is being harmed. He said people should be able to choose how and where they hold their money, and should have access to the most effective tools to manage it.

Ripley also criticized banks for making money from customers' deposits without offering meaningful returns. He added that Kraken’s aim is to create a system that gives more people access to financial tools, not just the wealthy.

Additionally, Dan Spuller, from the Blockchain Association, said large banks are trying to stop crypto exchanges like Kraken and Coinbase because they feel threatened by competition.

The appeal of stablecoin interest becomes clear when compared to banks. Some crypto platforms offer up to 5% interest on stablecoin holdings.

In contrast, the average interest on a traditional savings account in the US is just 0.6%, and even the best high-interest savings accounts do not go beyond 4%, based on data from Bankrate.

Recently, Kraken acquired Small Exchange for $100 million and gained a CFTC-regulated platform to expand its US derivatives trading offerings. What did co-CEO Arjun Sethi say? Read the full story.