Multicoin Exec Says GENIUS Act Will End Banks’ ‘Rip-Off’ of Retail Depositors with Low Rates

Multicoin Capital managing partner Tushar Jain has predicted that the GENIUS Act will trigger a competitive upheaval in retail banking, with major technology companies poised to challenge traditional banks by offering stablecoin products with superior yields and user ￰1￱ argued that banks have long exploited retail depositors by paying minimal interest ￰2￱ foresaw that tech giants like Meta, Google, and Apple would soon leverage their massive distribution networks to offer stablecoins with better returns, instant settlement, 24/7 payments, and free transfers embedded directly into widely used apps and operating ￰3￱ Genius Bill is the beginning of the end for banks' ability to rip off their retail depositors with minimal ￰4￱ Genius Bill I expect the big tech giants with mega distribution (Meta, Google, Apple, etc) to start competing with banks for retail ￰5￱ tech… ￰0￱ — Tushar Jain (@TusharJain_) October 4, 2025 Banking Industry Fights Yield-Sharing as Deposit Flight Fears Mount The banking sector has mounted an aggressive lobbying campaign to prevent stablecoin platforms from offering competitive yields to holders, despite the GENIUS Act’s prohibition applying only to issuers, not ￰6￱ major ￰7￱ trade organizations have urged Congress to close perceived “loopholes” that allow crypto exchanges to offer stablecoin yields through affiliate programs and marketing arrangements, citing Treasury estimates of potential $6.6 trillion deposit ￰8￱ analyst Ronit Ghose particularly warned that stablecoin interest payments could trigger 1980s-style deposit flight similar to when money market funds surged from $4 billion to $235 billion in seven years, draining traditional bank deposits.) October 3, 2025 Stablecoin Market Consolidation Faces Disruption From New Entrants The long-standing Tether-Circle duopoly, which controls 86% of the $298 billion stablecoin market, faces mounting pressure from new issuers offering yield-sharing arrangements and customizable reserve ￰9￱ relative supply share. |) September 30, 2025 Similarly, Hyperliquid’s public bidding process for its stablecoin attracted proposals from Native Markets, Paxos, Frax, Agora, Sky, Curve, and ￰10￱ platform currently hosts $5.5 billion in USDC, representing 7.8% of the total USDC supply, and aims to reduce its dependence on Circle while capturing reserve yield.

Ethena’s USDe has emerged as the biggest success story of 2025, surging to a $14.7 billion supply by passing along yield from crypto-based ￰11￱ yield-focused stablecoins, including Ondo’s USDY, Maker’s SUSD, Paxos’ USDG, and Agora’s AUSD, have collectively accumulated more supply than during the prior bull market ￰12￱ supply excluding USDT and USDC. |