Bitcoin’s rollercoaster ride this week has traders buzzing—and worried. As political tensions rise and former President Donald Trump signals another round of trade tariffs, crypto markets are starting to look like a potential safe haven again.
Bitcoin is now outpacing traditional stocks, especially after U.S. Treasury Secretary Scott Bessent gave crypto an unexpected nod of approval. But it’s not just bitcoin that has Wall Street nervous—stablecoins are emerging as a far more disruptive force.
In fact, according to financial experts, the U.S. banking system could be on the brink of its biggest shake-up in decades. 
“This is an existential threat to the banking industry, as well as to the financial system writ large,” said Arthur Wilmarth, professor emeritus of law at George Washington University, in a recent Reuters interview.
The concern? A fast-moving stablecoin bill that’s racing through Congress—and could completely change how people use money.
A New Era of Interest-Paying Stablecoins?
The legislation being debated could allow some stablecoins—cryptocurrencies pegged to the value of the U.S. dollar—to offer interest payments to holders. That means people might soon be able to earn interest from their digital dollars, bypassing traditional banks altogether.
Trump’s digital assets adviser, Bo Hines, confirmed the administration’s support, noting the White House wants a bill finalized before August. But competing versions of the bill are still being hashed out: the House version blocks stablecoins from paying interest, while a Senate version allows some exceptions.
If interest-paying stablecoins are greenlit, it could trigger a major migration of funds away from FDIC-insured bank accounts. The result? Greater risk for consumers—and a potential reckoning for the banking sector.
The Stablecoin Surge
What once seemed like a fringe innovation is now being viewed as a core part of the future financial system.
“Stablecoins are emerging as the first real blockchain use case to be fully integrated into traditional finance,” said Hina Sattar Joshi, digital asset sales director at TP ICAP. “We are witnessing the early stages of this transformation.”
Joshi believes the growing momentum could attract serious institutional investment. Stablecoins, in her view, are becoming a credible bridge between the old world of finance and the new.
What Happens Next?
Congress will soon face a critical decision: will stablecoins become a core part of consumer banking, or stay confined to the sidelines of crypto?
The answer could reshape the financial landscape, offering consumers more choices—but also more risk. If stablecoins evolve into digital checking accounts, traditional banks may need to adapt quickly or risk being left behind.
Bottom Line
Wall Street is bracing for what could be a financial game-changer. With stablecoin legislation on the fast track and crypto gaining legitimacy, the traditional banking model may soon face its greatest challenge yet. Whether that leads to innovation or instability now depends on how lawmakers—and the markets—respond.
