Interest-bearing stablecoins are increasingly seen as a potential threat to the traditional banking system. Industry observers note that if these digital assets continue gaining traction, they could redirect up to $6 trillion from conventional bank deposits—a shift that carries serious implications for credit availability.

The concern runs deep: as retail and institutional capital flows toward higher-yielding stablecoin platforms, traditional banks face deposit pressure. With fewer deposits on hand, lending institutions may tighten credit conditions, making it harder and more expensive for small businesses to access financing. This ripple effect could squeeze working capital loans, overdraft facilities, and other credit lifelines that SMEs depend on.

What makes this dynamic particularly noteworthy is the yield advantage. Stablecoins offering competitive interest rates attract capital that previously sat idle or earned minimal returns in traditional accounts. The question isn't just about financial innovation—it's about whether legacy banking infrastructure can maintain its role as the backbone of small business lending in a crypto-integrated economy.