The CEO of stablecoin issuer Circle has weighed in on the importance of stablecoin rewards and why he believes the banking industry’s concerns about interest payments on these assets are “absurd.”

Circle CEO Rejects Banks’ Stablecoin Fears

Speaking at the World Economic Forum (WEF) in Davos, Circle’s CEO, Jeremy Allaire, discussed banks’ growing concerns that paying interest on stablecoins poses a threat to the industry, calling the deposit flight narrative “totally absurd.”

The banking sector has expressed concerns about stablecoin rewards, arguing that interest payments will distort market dynamics and affect credit creation. In the US, banks have heavily criticized the GENIUS Act, claiming that it has loopholes that could pose risks to the financial system.

The executive rejected the sector’s general arguments, citing historical and practical reasons. He asserted that this exact argument has been historically used when new financial products, such as government money market funds, have emerged.

Notably, Bank of America CEO Brian Moynihan recently compared the digital assets to money market mutual funds, which require reserves to be held in short-term instruments, such as US Treasuries, reducing lending capacity in the system.

The executive told investors that the banking sector, small- and medium-sized businesses in particular, could face significant challenges if the US Congress does not prohibit interest-bearing stablecoins, as up to $6 trillion in deposits, or 30% to 35% of all US commercial bank deposits, could flow out of the banking system and into the stablecoin sector.

However, Allaire pointed out that, despite institutions claiming that financial products would “draw all the deposit base,” their growth has not “stopped the ability for lending to happen.”

The importance Of Rewards

Circle’s CEO also argued that stablecoins should not be singled out when rewards for other financial products exist and contribute to the system. “Those rewards (…) exist in every balance that you have with a credit card that you use. They exist around so many other financial products and services that we have,” he detailed.

“These rewards are actually very important,” Allaire continued. “They help with stickiness, they help with customer traction. They are not themselves like these huge monetary policy dampers.”

Most importantly, he pointed out that lending is moving away from the risk-taking of banks, with “a huge amount of lending is moving towards private credit.”

He cited a Wednesday WEF panel, in which a capital markets participant highlighted how the vast majority of GDP growth in the United States was “formed by capital market formation around junk bonds.”

“So private credit issuing junk bonds, capitalizing the build out of the American technology advancements, not bank credit,” the executive added.

Previously, Coinbase Institute shared a similar argument, affirming that “credit is evolving, not shrinking. Lending is shifting to private credit, fintech, and DeFi channels that don’t depend on deposits. Liquidity moves—it doesn’t vanish.”

Allaire concluded that “we want stablecoin money to be cash instrument money, prudentially supervised, very, very safe money. And then I think what we want to do is we want to build models for lending that build on top of stablecoins.”

Stablecoin issuer Circle has awarded a grant to support the United Nations’ push to modernize its internal payment systems, aiming to make humanitarian aid transfers faster, cheaper and more transparent.

The grant was announced Wednesday at the World Economic Forum in Davos, Switzerland. Circle did not disclose the size or structure of the grant.

The Circle Foundation said the funding would support the UN’s Digital Hub of Treasury Solutions (DHoTS), a program focused on improving how money moves across the UN’s global operations.

Circle Expands UN Stablecoin Aid Efforts

The initiative builds on earlier cooperation between Circle and the United Nations.

In 2022, Circle partnered with the UN Refugee Agency and DHoTS to facilitate USDC stablecoin payments to Ukrainians displaced by the war, marking one of the first large-scale uses of stablecoins in humanitarian aid distribution.

UN Development Programme administrator Alexander De Croo said digital payments could help stretch limited resources further at a time when humanitarian budgets are under strain.

“Stablecoin payments allow us to make every dollar work harder,” he said, pointing to inefficiencies tied to legacy banking infrastructure.

According to Circle, roughly $38 billion in humanitarian funding flows through outdated financial rails each year, often resulting in delays, high transaction fees and limited transparency.

Digital financial infrastructure, including blockchain-based payments, could help address those issues while improving accountability.

Circle Foundation is supporting the United Nations in their efforts to modernize global aid delivery.

The humanitarian system moves more than $38B every year, yet much of that aid still relies on slow, costly legacy financial rails.

Through its first international grant, Circle… pic.twitter.com/JwWXdmh55F

— Circle (@circle) January 21, 2026

UN High Commissioner for Refugees Barham Salih said the use of new technology was about more than efficiency.

“This is about using technology to uphold dignity and choice for people forced to flee, while maximizing impact for every dollar entrusted to us,” he said.

The grant comes shortly after Circle launched the Circle Foundation in December, a philanthropic arm focused on financial inclusion and resilience.

Supporting public-sector use cases for stablecoins appears to be an early priority.

Stablecoins are playing an increasingly prominent role in global payments. The sector has grown into a $312.7 billion market, with tokens widely used for remittances, business settlements and savings in regions facing currency instability.

Bermuda Unveils Plan for Fully On-Chain Economy With Coinbase and Circle

As reported, Bermuda has announced plans to place blockchain infrastructure at the core of its financial system, partnering with Coinbase and Circle to develop what officials describe as a fully on-chain economy.

The initiative was unveiled at the World Economic Forum in Davos, where Premier David Burt outlined a model that would integrate digital assets into everyday payments, financial services and government operations.

The push reflects long-standing challenges faced by the island’s economy, including high transaction fees, limited banking access and slow settlement times caused by global bank de-risking.

By using dollar-denominated stablecoins and blockchain-based settlement, Bermuda aims to bypass traditional correspondent banking networks and reduce costs for businesses, particularly small and medium-sized firms.

The rollout will begin with a pilot using Circle’s USDC stablecoin and Coinbase’s Base infrastructure, focusing on government and commercial payments, tokenization tools for financial institutions and nationwide digital literacy programs.

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On Monday, Coinbase (COIN) announced a new partnership with Circle (CRLC), the issuer of the USDC stablecoin, to create what they claim to be “the world’s first fully on-chain national economy” in Bermuda. 

Coinbase, Circle To Build New Digital Asset Infrastructure 

Under this initiative, Coinbase and Circle are set to provide digital asset infrastructure and enterprise tools to various stakeholders, including the Bermuda government, local banks, insurers, and small and medium-sized enterprises.

Bermuda’s Premier, E. David Burt, commented on the initiative, stating, “This initiative is about creating opportunity, lowering costs, and ensuring Bermudians benefit from the future of finance.”

Government agencies are expected to begin piloting payments using stablecoins such as Circle’s USDC, while financial institutions are set to adopt tokenization tools. Residents will also have the opportunity to engage in nationwide digital literacy programs that foster understanding of the emerging financial landscape.

The announcement highlighted that transitioning to an on-chain economy is anticipated to include reduced transaction costs and improved access to global finance, facilitated by modern digital wallets and infrastructure with Coinbase and Circle’s support.

Bermuda’s Crypto Landscape

Bermuda has positioned itself as a leader in the digital asset space, having established its own regulatory framework for digital assets as early as 2018. This approach has attracted numerous companies looking for regulatory clarity amid tightening regulations in other regions. 

The country’s regulatory framework currently supports a diverse range of regulated digital asset activities. The Bermuda Monetary Authority (BMA) is responsible for licensing crypto exchanges, yield-bearing stablecoin structures, and decentralized finance protocols under a cohesive supervisory regime. 

This structure enables tokenized money market funds to operate within the jurisdiction, and even allows digital-native insurers to manage reserves, collect premiums, and process claims using cryptocurrency, all while adhering to traditional financial oversight.

Bermuda’s focus on digital finance has generated significant business interest. Notably, in late 2024, the BMA issued the world’s first license to a decentralized derivatives exchange governed by a Decentralized Autonomous Organization (DAO). 

The jurisdiction also accommodates regulated derivatives operations linked to major exchanges, including Coinbase and Kraken, showcasing ongoing institutional confidence in its clear regulatory framework. 

Furthermore, Bermuda has attracted utility-driven firms like Haycen, which utilizes specialized stablecoins to offer faster trade financing, effectively bridging gaps often encountered by conventional banks.

In addressing the risks associated with digital finance, Premier Burt acknowledged that no financial system can be fully insulated from risk. “In life, you can’t insure anything,” he stated in an interview. 

He emphasized the importance of policymakers balancing caution with humility, allowing room for innovation while maintaining a robust regulatory environment in this still-evolving sector.

Featured image from DALL-E, chart from TradingView.com 

Circle and Coinbase have partnered with the Government of Bermuda to help the island nation go “fully onchain” by providing the digital infrastructure needed to support a nationwide transition to blockchain-based finance. The initiative was announced during the World Economic…

Bermuda is moving to place blockchain infrastructure at the center of its national economy, unveiling plans to build what officials describe as a “fully on-chain” financial system through partnerships with cryptocurrency exchange Coinbase and stablecoin issuer Circle.

It was unveiled on Monday at the World Economic Forum Annual Meeting in Davos, when executives of both companies announced a model, with Bermuda Premier David Burt attending to detail a model that would integrate digital assets into daily payments, financial services, and governmental functions.

We’re bringing an entire country onchain.

Bermuda is building the world’s first fully onchain national economy, with support from Coinbase and @Circle. pic.twitter.com/fFL1foSFHu

— Coinbase (@coinbase) January 19, 2026

In the case of Bermuda, which is a small island economy comprising about 65,000 residents, the push is a long-standing struggle with conventional financial rails.

Like most of the Caribbean jurisdictions, merchants and institutions are frequently charged high fees, have little access to onshore banking partners, and have slow settlement times as a result of de-risking by global banks.

The government reports that such frictions have been a burden on the competitiveness and margins, especially for small and medium-sized businesses.

The proposed on-chain framework is intended to bypass some of those constraints by relying on dollar-denominated stablecoins and blockchain-based settlement instead of correspondent banking networks.

Bermuda Pushes USDC Into Daily Commerce With Coinbase-Backed Pilot

Under the partnership, Bermuda will work with Circle’s USDC stablecoin and Coinbase’s Base infrastructure to pilot stablecoin-based payments across government agencies, financial institutions, and local businesses.

The first phase will focus on payments, tokenization tools for financial institutions, and nationwide digital literacy programs designed to help residents understand and safely use digital finance products.

Burt said the goal is to create opportunity and ensure Bermudians benefit directly from changes in the global financial system.

We’re taking Bermuda’s economy onchain@BermudaPremier @jerallaire https://t.co/lDqFUIb9qe pic.twitter.com/QGLzaI5VNw

— Brian Armstrong (@brian_armstrong) January 19, 2026

The announcement builds on groundwork laid years earlier when Bermuda introduced the Digital Asset Business Act in 2018, overseen by the Bermuda Monetary Authority.

Since then, more than 40 digital asset firms have been licensed or admitted into regulatory sandboxes overseen by the Bermuda Monetary Authority.

Coinbase and Circle were among the earliest global firms approved under the regime, and Coinbase currently operates a derivatives platform from Bermuda for non-U.S. users.

Momentum picked up further in 2025 at the Bermuda Digital Finance Forum, where the government, Coinbase, and Circle tested real-world adoption through an on-chain USDC airdrop.

Attendees received 100 USDC, which could be spent with newly onboarded local merchants.

The government noted that the experiment led to more Bermudian businesses accepting digital payments and deeper engagement from local financial institutions.

Officials say those efforts will expand at the Bermuda Digital Finance Forum 2026, scheduled for May, with broader business participation and a larger consumer stimulus component.

Bermuda Frames USDC as a Commerce Upgrade

USDC is a fundamental component of the strategy, as it is fully pegged to dollar-based reserves, and merchants can take payments through fast and low-cost methods without the risk of changes in the prices of cryptocurrencies such as Bitcoin.

Some Bermudian companies are already paying in USDC, and the government believes it is a means to have the modernized deal and remain tied to the U.S. dollar.

The project will be voluntary, and no resident or business is obliged to use on-chain tools, and the collaboration with Coinbase and Circle is not exclusive.

Instead, the strategy is framed as an incremental transition, with education programs and incentives designed to encourage uptake over time.

Officials see on-chain infrastructure as a way to strengthen that position while opening access to global capital markets for local firms.

In the country, there is no income or capital gains tax on digital assets, and the government has taken a compliance-first approach that emphasizes licensing, audits, and reserve requirements for stablecoin issuers.

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