This seems bad for 'stablecoins' given yield at a minimum offsets the real purchasing power loss due to inflation 

More like unstablecoins

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This just means the *issuer* of stablecoins can’t offer yield, right? You would still have the ability to get yield from defi, no?

Navigating the world of finance by day, pondering its flaws by night. ETH Maxi

Oh, I see. I wasn’t considering the expansion of stablecoin issuers to tradfi banks…🤔

Yes - thats correct

But lets say a bank issues a stablecoin to their customers, their customers would now have to take those funds to a 3rd party to get yield. There are a surprisingly large number of people who keep larger sums in checking accounts earning 0.1% or less, so many won't do that - they might not even know they can do that

The digitization of the dollar privatizes treasury returns to issuers - which is ofc what issuers want