THERE IS NO SUCH THING AS DEPOSIT FLIGHT dollar's can't "fly" out of the banking system. dollars can only exist in 3 places: - your pocket (physical) - a Fed master account (bank) - Treasury General Account (TGA)

changes in consumer behavior, such as from the introduction of new savings (MMFs) or payments instruments (stablecoins) CAN cause deposit migration, such as from one bank to another, or one class of banks to another

for example, investors have been pulling cash from their "savings" accounts and putting the cash in money market funds for years but when you invest in a MMF, the fund buys treasuries... where do they buy treasuries? from a seller who takes the cash and... puts it in their bank

similarly, fears have been raised that stablecoins will also cause "deposit flight" when a user purchases a stablecoin, dollars leave the user's bank account and go to a stablecoin issuer, who then purchases treasuries.. from a seller who puts the cash proceeds in.. the bank

so don't believe those who argue that dollars will "fly" out of the banking system. that's impossible. there could be some "deposit migration," if there are banks who do not offer competitive enough services -- that's always been true. but let's be precise when we make theese arguments.