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Campbell called stablecoin-driven deposit flight “mathematically not possible,” arguing deposits shift between accounts and banks.
Tue 27 Oct 2026 · 13:13 EDT · 1 min read
In Regulation
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Stablecoins cannot drain deposits from the banking system as a whole, Austin Campbell, founder of Zero Knowledge Consulting, said on CoinDesk’s The Policy Protocol, according to a clip CoinDesk posted on Tuesday. He called stablecoin-driven deposit flight “mathematically not possible.”
Campbell argued that stablecoins move bank deposits rather than destroy them. When a buyer pays dollars for a stablecoin, those dollars land in another bank account, such as the issuer’s reserve account; redemptions reverse the flow. Individual banks may lose deposits to others, but the system’s total is not reduced, he said.
Banks press for limits on stablecoin yield
The argument cuts against bank trade groups, which have warned that stablecoins paying yield could pull money from deposits and have pushed lawmakers and regulators to restrict them. Campbell previously led portfolio management at Paxos.
Disclosure: This article was edited by Kaye Quema. For more information on how we create and review content, see our Editorial Policy.
