Michaela
Tushar Jain, co-founder and managing partner of crypto investment firm Multicoin Capital, has said the GENIUS Act could shift retail deposits from traditional banks to higher-yield stablecoins, creating direct competition between banks and stablecoin issuers once the legislation takes full effect.
Key points:
- The GENIUS Act could shift retail deposits from traditional banks to higher-yield stablecoins, intensifying competition between banks, tech giants, and stablecoin issuers.
- Traditional banks may face pressure to raise interest rates, impacting profits, while regulators worldwide, including in Canada and Hong Kong, are considering stablecoin frameworks to remain competitive.
- Stablecoins are expected to reshape global finance by enabling faster, 24/7 payments and cross-border transactions, potentially redefining consumer expectations and the future structure of banking.
“The Genius Bill is the beginning of the end for banks’ ability to rip off their retail depositors with minimal interest,” Jain wrote in an X post on Saturday. Jain noted that after the GENIUS Act is fully implemented, major tech companies like Meta, Google, and Apple could begin competing with traditional banks for retail deposits, leveraging stablecoins to provide higher yields, faster settlement, and around-the-clock payment services. “These stablecoins will be embedded into the most widely distributed apps and operating systems in the world,” Jain wrote.
Jain added that traditional banks may face pressure to raise interest rates for depositors, which could significantly impact their profits. He also noted that the banking lobby sought to safeguard earnings through the GENIUS Act’s restrictions on paying interest to stablecoin holders.
Following the U.S. rollout of the GENIUS Act, other countries are exploring comparable regulations to stay competitive. In late September, Hong Kong-based fintech firm AnchorX launched AxCNH, a stablecoin pegged to the offshore Chinese Yuan (CNH). The token aims to simplify cross-border payments and settlements, targeting offshore Chinese businesses and nations involved in the Belt and Road Initiative (BRI).
In Canada, Ron Morrow, head of payments at the Bank of Canada, urged regulators to establish a clear stablecoin policy, warning that without action, the country could fall behind others in modernizing payment systems. He emphasized that stablecoins must offer safety and stability on par with traditional bank deposits to be considered money, calling on both federal and provincial authorities to implement a comprehensive framework.
The GENIUS Act’s ripple effects are poised to reshape the global financial landscape, prompting banks, regulators, and fintech innovators to reassess how money moves and earns. As stablecoins gain traction, they could redefine consumer expectations around accessibility, speed, and returns, forcing traditional institutions to adapt or risk losing relevance.
Meanwhile, international developments signal that stablecoin policy is no longer just a domestic matter. The coming years may see digital assets increasingly integrated into everyday finance, with implications for global payment networks, cross-border commerce, and the very structure of banking as we know it.
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Michaela has no crypto positions and does not hold any crypto assets. This article is provided for informational purposes only and should not be construed as financial advice. The Shib Magazine and The Shib Daily are the official media and publications of the Shiba Inu cryptocurrency project. Readers are encouraged to conduct their own research and consult with a qualified financial adviser before making any investment decisions.
