What happened?
The GENIUS Act and recent industry moves have sparked predictions that big tech and crypto platforms will start offering stablecoins with better yields and integrated payments, directly challenging traditional banks. Banking trade groups immediately lobbied to close perceived loopholes that let intermediaries share yield, even though the law targets issuers. At the same time, exchanges, fintechs, and some banks are already testing or launching yield-sharing stablecoins and tokenized deposit products, speeding up the shift.
Who does this affect?
Retail depositors stand to gain access to higher returns, instant settlement, and payments baked into apps they already use, rather than low-yield bank savings accounts. Traditional banks face the threat of deposit outflows and margin pressure as customers chase better yields, while fintechs, exchanges, and big tech have a big opportunity to capture deposits and reserve income. Regulators and stablecoin issuers also get pulled in, since rules about who can share yield and how reserves are structured will shape the market.
Why does this matter?
If deposits flow into yield-bearing stablecoins, trillions in retail balances could migrate away from banks, forcing lenders to raise rates or launch competing token products. That competition would accelerate innovation in tokenized banking, white-label issuance, and cross-chain plumbing while eroding the current Tether–Circle dominance. In short, yield-sharing stablecoins could reallocate banking revenue, reshape reserve economics, and create new profit pools across crypto, fintech, and legacy banks.