Professor Challenges Banking Myths on Stablecoin Yields as Legislation Stalls

Columbia Business School adjunct professor Omid Malekan has dismissed five common banking-industry misconceptions about stablecoin yields, calling them unsubstantiated myths that are delaying market structure legislation. The debate centers on who should earn interest from reserves backing stablecoins—a issue now holding up Congressional action.

Malekan argues stablecoins often operate with full reserves parked in Treasury bills and bank deposits, contradicting claims they drain banking liquidity. The real tension lies in the financial sector's resistance to decentralized alternatives that could disrupt traditional interest distribution models.

Credit markets already function significantly outside community banks through money market funds, Malekan notes, suggesting stablecoins represent an evolution rather than a threat to existing systems. The professor's intervention comes as lawmakers prepare to mark up crypto market structure bills this month.