Crypto Assets & Banking: Who would hold a US dollar stablecoin at no yield? It is a fair question. After all, stablecoin assets proved surprisingly stable after the surge in US interest rates. But it is a far more relevant question for traditional markets – deposits in the US banking system are $18 trillion, more than 100-times stablecoin assets. The good news is that depositors in the “relationship” category earn an interest rate of twice the standard rate for major banks. The bad news is that the standard rate is one basis point. Users of stablecoins may not earn interest, but their high velocity is indicative of their high utility. Don’t expect this to go away. The dependency of the digital ecosystem on stablecoins will rise when traditional banks limit their exposure. This is how stablecoins were created in the first place. And it has important implications for the future of banking. When JPM trademarked a crypto wallet, it rang the bell on the future of banking. What’s in your wallet? Crypto assets. Digital wallets spanned 3.2 billion users last year, and crypto is taking aim at that segment. A major advantage of digital wallets is that they are not limited to one bank or financial institution. Competition is good. The uncertainty is about the speed of adoption, not the direction of the trend. Global crypto asset wallets rose to 84 million last year. That’s roughly where WeChat Pay active users were in 2012 – it is 1.3 billion now. It’s early.