The GENIUS Act, a landmark legislation focused on stablecoins, could dramatically reshape the financial system by enabling people to earn higher yields outside traditional banks. According to Multicoin Capital’s co-founder, Tushar Jain, the law will trigger a major shift of deposits from banks into digital assets, ending decades of low-interest returns for savers.
Enacted in July 2025, the GENIUS Act sets new regulations for stablecoin issuers in the United States. Jain believes it will mark “the beginning of the end for banks’ ability to rip off their retail depositors with minimal interest.”
He expects Big Tech companies — including Meta, Google, and Apple — to challenge traditional banks by offering stablecoin-based savings with superior user experience, instant transactions, and 24/7 payment systems. This could redefine how people store and move money globally.
Banks Fight to Protect Their Profits
In mid-August, banking groups urged regulators to close what they called a “loophole” in the new legislation. While the GENIUS Act prohibits stablecoin issuers from directly paying interest or yield, it does not prevent their affiliates or partner exchanges from doing so.
This loophole could allow companies to offer yield-bearing stablecoins indirectly, giving crypto platforms a strong advantage over traditional savings accounts.
Potential $6.6 Trillion Deposit Exodus
According to a U.S. Treasury Department estimate, widespread adoption of yield-paying stablecoins could drain up to $6.6 trillion from traditional bank deposits. The Bank Policy Institute warned that such outflows could cause credit shortages, higher loan rates, and increased costs for small businesses.
However, for consumers, this could finally mean fair competition in the deposit market. As Jain stated, “Banks will have to raise interest rates to retain customers, and their earnings will suffer as a result.”
Stablecoins Offer Up to 10X Higher Returns
Currently, the average U.S. savings account yields only 0.40%, while European rates average around 0.25%, according to Patrick Collison, CEO of Stripe.
In contrast, decentralized lending platforms such as Aave offer 4.02% on Tether (USDT) and 3.69% on Circle’s USDC, nearly ten times more than banks. This performance gap highlights why millions of savers could soon prefer stablecoin-based savings.
Big Tech’s Stablecoin Ambitions
Major tech firms including Apple, Google, Airbnb, and X are reportedly exploring stablecoin issuance to reduce transaction fees and improve cross-border payments. If implemented, their entry could supercharge adoption across retail and corporate sectors.
At present, the stablecoin market cap stands at $308.3 billion, dominated by USDT ($177B) and USDC ($75.2B). Analysts expect this figure to surge dramatically once the GENIUS Act fully takes effect.
The GENIUS Act represents a major victory for consumers, shifting financial power away from traditional institutions toward digital, transparent, and high-yield alternatives. If predictions hold true, stablecoins could become the standard for savings and payments — marking the true end of the banking rip-off era.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.