Matt Levine’s Money Stuff: Stablecoin Narrow Banking

Jan. 15, 2026, 7:09 PM UTC

Stablecoin interest

If you have dollars, you can put them in a checking account at a bank. This is convenient (the bank will let you use those dollars to make payments) and fairly safe (the bank probably won’t fail, and if it does your deposits are insured, up to some limit, by the US government), but not especially lucrative. The bank will use your money to do stuff — make loans, buy securities, etc. — and will make some money from those activities, but you won’t see much of that money. The bank will lose some money (from bad loans or bad trades), and ...

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