Stablecoins may not drain banks of dollars but they can still make lending more expensive

Here's a hypothetical scenario: you want to use $100 out of your bank account to buy newly issued stablecoins. The company issuing the stablecoins takes your dollars, puts them in its own bank account, and gives you a balance you can send around on a blockchain.You got the product you wanted, and somewhere in the vast and confusing realm of banking, the $100 is still there.From a distance, this looks like something banks shouldn't worry about. Sure, they lost a deposit, but they also got a deposit back, so why do bankers keep warning that stablecoins could drain the financial system?The thing is, your bank really liked having you as the customer. If you take your money away, now it owes that money to a company managing withdrawals for thousands of people, with someone paid to decide where the reserves should go.The dollars came back, but they came back with a different owner, and that owner can be a much more demanding creditor.This is the part of the stablecoin debate that gets lost when everyone starts estimating how many trillions will leave banks. The amount in the bank can stay the same while the bank gets a much worse deal, because a deposit's value to a bank depends partly o...