Columbia professor rebuts five stablecoin myths slowing US crypto reform

Beincrypto reports Columbia Business School adjunct professor and crypto policy analyst Omid Malekan has challenged five common myths lawmakers cite to justify restricting stablecoin yields, saying those misconceptions—rather than evidence of risk—are delaying US crypto reform. Malekan identifies myths that stablecoins shrink bank deposits, threaten bank credit supply, require protection of banks from competition, put community banks most at risk, and prioritize borrowers over savers.

He argues foreign demand and Treasury-backed reserves tied to stablecoins tend to increase domestic banking activity and dollar demand, and that reward-bearing stablecoins amplify this effect. He says concerns about reduced lending conflate profitability with credit supply, noting banks can offset deposit competition by adjusting reserves or depositor rates; his view aligns with commentary from a Paradigm regulatory official and the Blockchain Association.

Malekan also points to data showing banks account for a minority share of total credit, argues large money-center banks face the most competition, and contends that allowing issuers to share yield supports savers and could lower borrowing costs.

Key Topics

Crypto, Omid Malekan, Columbia Business School, Stablecoins, Genius Act, Blockchain Association