Jeremy Allaire on the difference between stablecoins and bank deposits

FDIC exists, actually, because banks don't hold your money on a full reserve basis.  They take your money and then they lend it out eight times over.  The insurance exists because the banks actually don't have your money.  They've lent it out a bunch of times.  And so it's really a protection if there was a run on the bank that there would be some coverage for people.  Electronic money is much more conservative.  We are required by law to hold one-for-one reserves.

~ Jeremy Allaire, Circle co-founder, Yahoo!Finance interview in Davos, 3:45 mark, January 22, 2023