Leak of bank deposits. For years, traditional banks have watched the crypto ecosystem with a mixture of condescension and mistrusta bit like an old bookseller who discovers Tiktok. But times change, and a certain Ronit Ghose, a great manitou of the “Future of Finance” division at Citi, has just ringed the alarm.
The key points of this article:
Ronit Ghose of Citi sounded the alarm by comparing the potential impact of stablecoins on bank deposits at the massive flight of funds in the 80s.
The Genius Act, an American law, revealed a disturbing flaw allowing Stablecoins to pay interest, thus threatening traditional financial stability.
Stablecoins, a threat to banks?
In a report relayed by the Financial Times, Ghose compared the current situation to that of the 1980s. At the time, the monetary funds had started to pay attractive interests, encouraging customers to massively withdraw their money from the banks. In a few years, hundreds of billions of dollars have fled bank deposits. Today, history is repeated, but the competitor is called Stablecoin. These cryptocurrencies whose value is attached to a fiduciary currency (like the dollar) have become a tool of choice for exchanges. What if they began to remunerate their holders? According to Ghose and other experts like Sean Viergutz from Pwc, it would be a massive exodus of banking deposits, a real debacle.
The showdown around the Genius Act
The problem is that this threat is not the result of chance, but of legislation. THE GENIUS Acta law recently promulgated in the United States, aims to supervise stablecoins. Except that, depending on the banks, the law contains a flaw that would allow stable -co -emitters to pay interest through affiliated companies. For the Bank Policy Institutea powerful lobbying organization, this «flaw» is a direct threat to financial stability. They brandish figures worthy of a disaster film: up to $ 6,600 billion in deposits could fly away. Their argument is that, to compete, banks should increase their own interest rates, making credit more expensive for everyone. On the other side, stablecoins issuers do not intend to be done. For them, it is not a question of war, but concurrence et d’innovation. Compeating their users is their right, and that would only offer consumers more choices and boost the financial sector. In summary, the GENIUS Act opened the Pandora's box. While Donald Trump wishes to make the dollar the undisputed king of the crypto, he set up a revolution which could well redistribute the cards of traditional finance. The standoff is just beginning.