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Lending

Lending protocols form the backbone of the decentralized money market, allowing users to lend or borrow digital assets without intermediaries. Using smart contracts, platforms like Aave and Morpho automate interest rates based on supply and demand while requiring over-collateralization for security. The 2026 lending landscape features advanced permissionless vaults and institutional-grade credit lines. This tag covers the evolution of capital efficiency, liquidations, and the integration of diverse collateral types, including LSTs and tokenized RWAs.

15502 Articles
Created: 2026/02/02 18:52
Updated: 2026/02/02 18:52
SuiLend: Elixir has repaid all USDC debts, and withdrawals from the previously segregated lending market have been restored.

SuiLend: Elixir has repaid all USDC debts, and withdrawals from the previously segregated lending market have been restored.

PANews reported on November 5th that Sui ecosystem lending protocol Suilend announced on the X platform that the Elixir team has repaid all USDC debts, and the previously isolated lending market withdrawal function has been restored. SuiLend previously stated that it was closely monitoring the massive losses at Stream Finance, which reportedly suffered its largest single exposure of $93 million in losses, involving Elixir's deUSD.

Author: PANews

2025/11/05

The Next 100x Token? Investors Are Buying This New Crypto Before It Hits $0.06

The Next 100x Token? Investors Are Buying This New Crypto Before It Hits $0.06

The post The Next 100x Token? Investors Are Buying This New Crypto Before It Hits $0.06 appeared on BitcoinEthereumNews.com. Every few years, a new project that appeals to the first investors before the rest of the world in the crypto market is unveiled. In 2021 that project was Solana. In 2023 it was PEPE. Today, at the beginning of 2026, it is mentioned that the next one can be Mutuum Finance (MUTM). It has a live presale, strong fundamentals and the actual product under construction. This is the reason why investors are purchasing this new crypto before it hits the price of $0.06. Mutuum Finance (MUTM) Mutuum Finance is creating a decentralized and non-custodial lending and borrowing procedure to introduce greater transparency and safety to the credit markets within DeFi. The project will allow users to lend and borrow digital assets without middle-men. The principle of the Peer-to-Contract (P2C) model goes as follows: upon depositing resources in a joint liquidity pool, users can get mtTokens. These are the minted tokens, also referred to as mtTokens that experience an increase in value over time as the borrowers make the interest payments. Take an example: 1ETH deposited results in 1mtETH, whereas over time, the value of the 1mETH will increase on its own, and there will be a passive income without requiring any manipulation. The Peer-to-peer (P2P) layer is where borrowers and the lenders are connected. The platform attracts borrowers with sustainable or fluctuating interest rates, and the platform will self-regulate the rates depending on the demand. Every loan has a Loan-to-Value (LTV) ratio to ensure that risks are kept at bay. A user can borrow up to $750 – $1000 given that he/she presents a satisfying collateral. In case of a decline in the collateral to an unsafe amount, it is automatically liquidated, thereby safeguarding the lenders and ensuring the stability of the protocol. High Sold and Soaring Numbers A…

Author: BitcoinEthereumNews

2025/11/05

Metaplanet secures $100M loan collateralized by Bitcoin holdings

Metaplanet secures $100M loan collateralized by Bitcoin holdings

The post Metaplanet secures $100M loan collateralized by Bitcoin holdings appeared on BitcoinEthereumNews.com. Key Takeaways Metaplanet, a Japanese investment firm, secured a $100 million loan backed by its Bitcoin holdings. This move allows Metaplanet to tap into traditional credit markets while holding onto its Bitcoin. Metaplanet, a Japan-based investment firm focused on Bitcoin treasury operations, secured a $100 million loan collateralized by its Bitcoin holdings. The financing represents a significant expansion of the company’s cryptocurrency-backed credit facilities. The loan structure allows Metaplanet to access traditional capital markets while maintaining its Bitcoin position, reflecting growing institutional acceptance of digital assets as collateral for corporate financing. Metaplanet has positioned itself as a pioneer in Japan’s Bitcoin ecosystem by integrating cryptocurrency into traditional financial strategies. The company previously initiated a share buyback program utilizing Bitcoin collateral to enhance capital efficiency. The financing comes as more corporations explore Bitcoin-backed lending solutions to optimize their treasury management while preserving exposure to digital asset appreciation. Source: https://cryptobriefing.com/metaplanet-bitcoin-collateral-loan-2025/

Author: BitcoinEthereumNews

2025/11/05

Fastest Bitcoin Layer-2 in History Raises $25.7M: Bitcoin Hyper to Soar Next?

Fastest Bitcoin Layer-2 in History Raises $25.7M: Bitcoin Hyper to Soar Next?

Quick Facts: ➡️Bitcoin’s base layer limits DeFi. Low TPS, minutes-long finality, fee spikes and minimal programmability push liquidity to EVM and Solana, fragmenting $BTC-native activity. ➡️Reliance on liquidity silos deters builders and users, making seamless $BTC collateral use across dApps difficult. ➡️Bitcoin Hyper’s SVM Layer 2 batches to Bitcoin, delivering near-instant, low-fee dApps while anchoring […]

Author: Bitcoinist

2025/11/05

Arthur Hayes' new book: Why government deficits will be the ultimate fuel for the crypto bull market?

Arthur Hayes' new book: Why government deficits will be the ultimate fuel for the crypto bull market?

Introduction: Political Incentives and the Inevitability of Debt Praise to Satoshi Nakamoto, whose existence and the law of compound interest are independent of individual identity. Even governments have only two ways to pay for expenses: using savings (taxes) or issuing debt. For governments, savings are equivalent to taxes. It's well known that taxes are unpopular with the public, but spending money is much more appealing. Therefore, when distributing welfare to the people, politicians tend to issue debt. Politicians always tend to borrow from the future because when the bills are due, they may no longer be in office. If all governments are "hard-coded" to issue debt rather than raise taxes to distribute welfare due to incentives for officials, then the next key question is: how do buyers of U.S. Treasury bonds finance these purchases? Do they use their own savings/equity, or do they finance them through borrowing? Answering these questions, especially in the context of "Pax Americana," is crucial for predicting future dollar money creation. If marginal buyers of U.S. Treasury bonds finance their purchases, we can observe who is providing them with the loans. Once we know the identities of these debt financiers, we can determine whether they are creating money out of thin air to lend or using their own equity to lend. If, after answering all the questions, we find that the financing parties of government bonds create money in the process of lending, then we can draw the following conclusion: Government-issued debt will increase the money supply. If this assertion holds true, then we can estimate the upper limit of credit that the financing party can issue (assuming there is an upper limit). These questions are important because my argument is that if government borrowing continues to grow as predicted by large banks (TBTF Banks), the U.S. Treasury, and the Congressional Budget Office, then the Federal Reserve's balance sheet will also grow accordingly. If the Federal Reserve's balance sheet grows, it will be a boon to dollar liquidity, which will ultimately drive up the prices of Bitcoin and other cryptocurrencies. Next, we will answer the questions one by one and evaluate this logic puzzle. Q&A Session Will US President Trump finance the deficit through tax cuts? No. He and the Republicans recently extended the 2017 tax cuts. Is the U.S. Treasury borrowing money to cover the federal deficit, and will it continue to do so in the future? Yes. Below are estimates from major bankers and U.S. government agencies. As you can see, they project a deficit of approximately $2 trillion, financed by $2 trillion in borrowing. Given that the answer to the first two questions is "yes", then: Annual federal deficit = Annual issuance of Treasury bonds Next, we will analyze step by step the main buyers of government bonds and how they finance their purchases. "Waste" that swallows up debt 1. Foreign central banks If "peace under American rule" is willing to steal funds from Russia (a nuclear power and the world's largest commodity exporter), then no foreign holder of US Treasury bonds can be assured of safety. Foreign central bank reserve managers, aware of the risk of expropriation, prefer to buy gold rather than US Treasury bonds. Therefore, since Russia's invasion of Ukraine in February 2022, gold prices have truly surged. 2. The U.S. private sector According to data from the U.S. Bureau of Labor Statistics, the personal savings rate was 4.6% in 2024. In the same year, the U.S. federal deficit accounted for 6% of GDP. Given that the deficit is larger than the savings rate, the private sector is unlikely to become a marginal buyer of government bonds. 3. Commercial banks Are commercial banks in the four major currency centers buying large amounts of US Treasury bonds? The answer is no. In fiscal year 2025, these four major monetary centers purchased approximately $300 billion worth of U.S. Treasury bonds. In the same fiscal year, the Treasury issued $1.992 trillion in U.S. Treasury bonds. While these buyers are undoubtedly significant purchasers of U.S. Treasury bonds, they are not the final, marginal buyers. 4. Relative Value (RV) Hedge Funds RV funds are marginal buyers of Treasury bonds, a fact acknowledged in a recent Federal Reserve document. Our findings suggest that Cayman Islands hedge funds are increasingly becoming marginal foreign buyers of U.S. Treasury bonds and bonds. As shown in Figure 5, from January 2022 to December 2024—a period during which the Federal Reserve reduced its balance sheet by allowing maturing Treasury bonds to flow out of its portfolios—Cayman Islands hedge funds made net purchases of $1.2 trillion in Treasury bonds. Assuming these purchases consisted entirely of Treasury bonds and bonds, they absorbed 37% of the net issuance of Treasury bonds and bonds, almost equivalent to the total purchases by all other foreign investors combined. RV Fund's trading model: Buy spot treasury bonds Sell the corresponding Treasury bond futures contracts Thanks to Joseph Wang for providing the chart. SOFR trading volume is a proxy for the size of RV funds' participation in the Treasury market. As you can see, the increase in debt burden corresponds to the increase in SOFR trading volume. This indicates that RV funds are marginal buyers of Treasury bonds. RV funds engage in this type of trading to profit from the tiny spread between the two instruments. Because this spread is extremely small (measured in basis points; 1 basis point = 0.01%), the only way to make money is by financing the purchase of government bonds. This leads us to the most important part of this article: understanding the Fed's next move. How does the RV Fund finance its purchase of government bonds? Repurchase market, implicit quantitative easing and dollar creation RV Fund finances its Treasury purchases through repurchase agreements (repo). In a seamless transaction, RV Fund borrows overnight cash using the purchased Treasury securities as collateral, and then uses this borrowed cash to settle the Treasury bonds. If cash is plentiful, the repo rate will trade at or below the upper limit of the Federal Reserve's federal funds rate. Why? How the Federal Reserve manipulates short-term interest rates The Federal Reserve has two policy rates: the upper limit and the lower limit of the federal funds rate; currently, they are 4.00% and 3.75%, respectively. To enforce the real short-term interest rate (SOFR, the secured overnight funding rate) within this range, the Fed uses the following tools (listed in ascending order of interest rate): Overnight Reverse Repurchase Agreement (RRP): Money market funds (MMFs) and commercial banks deposit cash here overnight to earn interest paid by the Federal Reserve. Reward Rate: The lower bound of the federal funds rate. Interest on Excess Reserves (IORB): Commercial banks earn interest on excess reserves held by them at the Federal Reserve. Incentive Rate: Between upper and lower limits. Standing Repurchase Facility (SRF): When cash is tight, it allows commercial banks and other financial institutions to pledge eligible securities (mainly U.S. Treasury bonds) and receive cash from the Federal Reserve. In essence, the Fed prints money and exchanges it for pledged securities. Reward Rate: The upper limit of the federal funds rate. The relationship among the three: Federal Funds Rate Lower Bound = RRP < IORB < SRF = Federal Funds Rate Upper Bound The SOFR (Secured Overnight Funding Rate) is the Federal Reserve's target rate, representing the composite rate of various repurchase agreements. If the SOFR rate exceeds the federal funds rate ceiling, it indicates a systemic cash crunch, which could trigger significant problems. A cash crunch would cause the SOFR to spike, and the highly leveraged fiat-based financial system would cease to function. This is because if buyers and sellers of marginal liquidity cannot roll over their liabilities near the predictable federal funds rate, they will suffer huge losses and stop providing liquidity to the system. No one will buy US Treasury bonds because they cannot obtain cheap leverage, making it impossible for the US government to finance at an affordable cost. Exit of marginal cash providers What caused SOFR trading prices to be above the upper limit? We need to examine the marginal cash providers in the repo market: money market funds (MMFs) and commercial banks. Money Market Fund (MMF) Exit: The goal of MMFs is to earn short-term interest with minimal credit risk. Previously, MMFs would withdraw funds from RRPs and invest them in the repo market because RRP < SOFR. However, now, due to the highly attractive yields on short-term Treasury bills (T-bills), MMFs are withdrawing funds from RRPs and lending them to the US government. With RRP balances nearing zero, MMFs have essentially exited the cash supply of the repo market. Commercial banks' constraints: Banks are willing to provide reserves to the repo market because IORB < SOFR. However, a bank's ability to provide cash depends on the adequacy of its reserves. Since the Federal Reserve began quantitative tightening (QT) in early 2022, bank reserves have decreased by trillions of dollars. Once balance sheet capacity shrinks, banks are forced to charge higher interest rates to provide cash. Starting in 2022, both the MMF and banks, the two marginal cash providers, will have less cash to supply the repurchase market. At some point, neither will be willing or able to provide cash at a rate below or equal to the federal funds rate ceiling. At the same time, the demand for cash is rising. This is because former President Biden and current President Trump continue their extravagant spending, demanding the issuance of more Treasury bonds. RV funds, the marginal buyers of Treasury bonds, must finance these purchases in the repurchase market. If they cannot obtain daily funding at rates below or slightly below the federal funds rate ceiling, they will stop buying U.S. Treasury bonds, and the U.S. government will be unable to finance itself at affordable rates. The activation of SRF and Stealth QE Because a similar situation occurred in 2019, the Federal Reserve established the SRF (Standing Repurchase Facility). As long as acceptable collateral is provided, the Fed can provide an unlimited amount of cash at the SRF rate (the upper limit of the federal funds rate). Therefore, RV funds can be confident that no matter how tight cash becomes, they will always be able to obtain funding in the worst-case scenario—the upper limit of the federal funds rate. If the SRF balance is above zero, we know that the Federal Reserve is using the money it prints to cash in the checks made by politicians. Treasury bond issuance = Increase in the supply of US dollars The chart above (top panel) shows the difference between the SOFR (Federal Funds Rate cap) and the SRF (Small Free Trade Area) rates. When this difference is close to zero or positive, cash is tight. During these periods, the SRF (bottom panel, in billions of dollars) is used non-negotiably. Using the SRF allows borrowers to avoid paying higher, less manipulated SOFR rates. Stealth QE: The Federal Reserve has two methods to ensure sufficient cash in the system: the first is to create bank reserves by purchasing bank securities, i.e., quantitative easing (QE). The second is to freely lend to the repurchase market through the SRF (Special Funding Request). QE is now considered a "swear word," widely associated with money printing and inflation. To avoid accusations of triggering inflation, the Federal Reserve will strive to claim that its policy is not QE. This means that the SRF (Special Funding Flow) will become the primary channel for printed money to flow into the global financial system, rather than creating more bank reserves through QE. This can only buy some time. But ultimately, the exponential expansion of government debt issuance will force the SRF to be used repeatedly. Remember, Treasury Secretary Buffalo Bill Bessent not only needs to issue $2 trillion annually to finance the government, but also trillions more to roll over maturing debt. Implicit quantitative easing is imminent. While I don't know the exact timing, if current money market conditions persist and government debt piles up, the SRF (Special Fund of Last Resort) balance, acting as the lender of last resort, will have to grow. As the SRF balance increases, the global supply of fiat currency, the US dollar, will also expand. This phenomenon will reignite the Bitcoin bull market. Current Market Stagnation and Opportunities We must control capital before implicit quantitative easing begins. Market volatility is expected to continue, especially until the US government shutdown ends. Currently, the Treasury is borrowing money through debt auctions (negative for dollar liquidity), but has not yet spent this money (positive for dollar liquidity). The Treasury's General Account (TGA) balance is about $150 billion higher than the $850 billion target, and this additional liquidity will only be released into the market after the government reopens. This liquidity siphon effect is one of the reasons for the current weakness in the crypto market. With the four-year anniversary of Bitcoin's all-time high in 2021 fast approaching, many will mistakenly identify this period of market weakness and fatigue as a top and sell off their holdings. Of course, this assumes they weren't wiped out in the altcoin crash a few weeks ago. But this is a mistake. The logic behind the dollar money market doesn't lie. This corner of the market is shrouded in obscure jargon, but once you translate those terms into "printing money" or "destroying currency," it becomes easy to understand how to grasp the trends.

Author: PANews

2025/11/05

Polygon Founder Backs Katana as ZK TVL Hits $512M

Polygon Founder Backs Katana as ZK TVL Hits $512M

The post Polygon Founder Backs Katana as ZK TVL Hits $512M appeared on BitcoinEthereumNews.com. Sandeep Nailwal said Polygon played a big role in getting ZK proofs adopted and pointed at Katana’s rapid DeFi growth. Katana is now described as the second largest ZK rollup in the Polygon-linked ecosystem with about $512 million locked. The upcoming KAT token will anchor governance, liquidity rewards, and fees to keep Katana’s ZK DeFi flywheel running. Polygon’s growing bet on zero knowledge technology has started to show concrete results as co-founder Sandeep Nailwal drew fresh attention to Katana, a DeFi focused Layer 2 that is now one of the largest ZK rollups in the Polygon environment. In a post on X, Nailwal talked about how Polygon has played a “big role” in the adoption of ZK proofs, adding that Polygon’s Agglayer connects multiple ZK rollups into one scalable framework.  ZK proofs have become critical to blockchain privacy and scaling. Always proud to see that Polygon played a big role in that. Polygon took massive bet on ZK. Today Polygon Agglayer is powering multiple ZK rollups with Katana being the biggest. Few realize that Katana is the… https://t.co/nsc9ox9lF3 pic.twitter.com/QFHvW3d6rV — Sandeep | CEO, Polygon Foundation (※,※) (@sandeepnailwal) November 4, 2025 Polygon’s ZK Stack Is Now Producing High TVL Rollups Over the past few years, Polygon has positioned itself as a leader in zero-knowledge scaling solutions, investing heavily in ZK rollups and interoperability infrastructure. That focus is now materializing through Polygon Agglayer. Among these, Katana stands out, currently ranked as the second-largest ZK rollup by DeFi total value locked (TVL), trailing only Linea, according to DefiLlama. With around $512 million in DeFi TVL, Katana ranks 15th overall among Layer-1 and Layer-2 chains, only behind established ecosystems like Aptos, Avalanche, and Sui. ZK Tech Has Moved From Theory to Polygon-Ready Rollups Data from a16z crypto shows how ZK technology has evolved from…

Author: BitcoinEthereumNews

2025/11/05

3 Best Meme Coins That Could Grow Your Capital Faster Than Shiba Inu (SHIB) This Cycle

3 Best Meme Coins That Could Grow Your Capital Faster Than Shiba Inu (SHIB) This Cycle

The meme coin market is entering a new acceleration phase as liquidity begins to rotate back into speculative altcoins.

Author: Cryptodaily

2025/11/05

Crypto Market Cap Drops $1.2 Trillion in Eight Weeks – Was This Reset Needed?

Crypto Market Cap Drops $1.2 Trillion in Eight Weeks – Was This Reset Needed?

The post Crypto Market Cap Drops $1.2 Trillion in Eight Weeks – Was This Reset Needed? appeared first on Coinpedia Fintech News “Crypto didn’t crash. It was executed.” That one line from analyst and author Shanaka Perera has everyone on X buzzing and recapping what happened in one of crypto’s most dramatic months. Over just eight weeks, the global crypto market cap fell from $4.6 trillion to $3.4 trillion, erasing nearly $1.2 trillion in value. Was this just another crypto winter? Signs say no. It was a massive deleveraging event, a technical wipeout where too much leverage collided with too little liquidity. The Day the Leverage Broke On October 10, over $19 billion worth of leveraged positions were liquidated in just 24 hours, according to CoinGlass data. In the days around it, nearly 487,000 traders were wiped out daily. The problem started when open interest, the total value of all futures contracts, hit a record $217 billion, while spot liquidity dropped to just 5% of normal levels. That imbalance created a feedback loop. As prices dipped, margin calls kicked in, triggering forced selling, which drove prices even lower. By the end of the month, open interest had collapsed 43% to around $123 billion, marking one of the fastest market resets in years. Perera described it as “The machine ate itself.”  Sounds like it’s all bad. But the fundamentals are telling a very different story.  Meanwhile, Crypto Adoption Hit Record Highs While prices fell, crypto adoption and on-chain activity hit all-time highs. Independent data shows the number of global crypto users have jumped to around 560 million, up by 40 million in just six months. Stablecoins now power nearly 30% of all crypto transactions, triple their share from 2022. Institutional players doubled down too. BlackRock and MicroStrategy collectively hold over 1 million Bitcoin, and major fund houses like Fidelity and Franklin Templeton have rolled out regulated crypto products. Read More: Redditors Reveal Hard Truths of Crypto Investing After Years in the Market In the U.S., the GENIUS Act was put into effect, and the CLARITY Act gave stablecoins a clear legal framework. In short – while traders were forced out, the builders and institutions kept moving in. Why This Isn’t 2022 All Over Again Back in 2022, both prices and adoption collapsed. Exchanges failed, regulation was unclear, and trust evaporated. This time is different. The system reset itself rather than collapsing. DeFi lending volumes have grown to $39 billion, real-world asset tokenization crossed $8 billion, and blockchain infrastructure has become faster and cheaper. What Comes Next If history repeats, the next phase could be powerful. Perera points out that every major reset in crypto, from 2017 to 2021, was followed by new highs once leverage cleared out. The indicators to watch now: open interest falling below $30B, ETF inflows topping $5B a week, and stablecoin supply growing 20% monthly. When those align, markets usually turn. “Leverage massacred speculators. Fundamentals rewarded builders.” The markets seem to have cut off the noise. Once it settles, the same mechanics that broke the market could be the ones to push it higher again.

Author: Coinstats

2025/11/05

Next 1000x Crypto News Live Today: Early Alpha on the Latest Crypto Gems (November 5)

Next 1000x Crypto News Live Today: Early Alpha on the Latest Crypto Gems (November 5)

Stay Ahead with the Latest Insights of Today’s Next 1000x Crypto Check out our Live Next 1000x Crypto Updates for November 5, 2025! Crypto is a multi-trillion-dollar industry, with 10x, 100x, or even 1000x opportunities lying there, just waiting to be found. Take Dogecoin 36,000% increase in 12 years, or XRPs 42,000% performance in the […]

Author: Bitcoinist

2025/11/05

Coinbase Exec Slams Banks for Blocking Crypto Charter Bid

Coinbase Exec Slams Banks for Blocking Crypto Charter Bid

Coinbase Chief Legal Officer Paul Grewal publicly condemned traditional banking groups for opposing the crypto exchange’s national trust bank charter application, accusing them of prioritizing protectionism over consumer protection. The pushback from banking associations intensified this week as both community banks and Wall Street lobbying groups mounted coordinated efforts to block crypto firms from securing federal banking licenses. Grewal fired back after the Independent Community Bankers of America urged federal regulators to deny Coinbase’s charter application for its subsidiary, Coinbase National Trust Company. “Imagine opposing a regulated trust charter because you prefer crypto to stay… unregulated,” Grewal wrote on X, adding that bank lobbyists are attempting to “dig regulatory moats to protect their own.“ Banking Groups Mount Coordinated Opposition The ICBA submitted a detailed opposition letter to the Office of the Comptroller of the Currency on November 3, arguing that Coinbase’s application fails to meet statutory chartering standards on multiple grounds. The banking group’s letter claims the application exhibits fundamental deficiencies in governance, profitability, sustainability, and receivership complexity, particularly during crypto bear markets when both Coinbase and its subsidiary would face simultaneous financial pressure. The ICBA letter also challenges the legal validity of OCC Interpretive Letter 1176, which permits national trust banks to engage in non-fiduciary activities beyond traditional trust services. The banking group contends that this interpretive letter was issued without the required public notice and comment procedures under the Administrative Procedure Act, rendering it legally invalid as a basis for Coinbase’s application. Meanwhile, a separate banking lobby emerged in the stablecoin debate. The American Bankers Association and 52 state banking associations submitted a joint letter to the Treasury Department on November 4, urging strict enforcement of the GENIUS Act’s prohibition on stablecoin interest payments. The coordinated response addresses what banks view as a “loophole” allowing digital asset platforms to circumvent the law by offering interest through affiliates rather than directly from stablecoin issuers. Stablecoin Interest Debate Intensifies The banking associations warned that without a broad interpretation of the interest ban, digital asset platforms may exploit loopholes through high-yield rewards and incentives, which would undermine the law’s intent to keep stablecoins as payment tools rather than investment vehicles. Senator Mike Rounds previously told Politico the interest workaround “looks like an end-run on the original legislation.” At the same time, Federal Reserve Governor Christopher Waller stated stablecoins should function as pure payment instruments, not interest-bearing deposits. “It’s not an investment vehicle. It’s not a time deposit where you’re holding it to earn interest,” he said. The banking groups argue that interest-bearing stablecoins could trigger a 25.9% loss in bank deposits, eliminating approximately $1.5 trillion in lending capacity and shrinking small business and farm credit by $110 billion and $62 billion, respectively. Community banks serving rural and underserved areas would face disproportionate impact from deposit outflows to yield-generating stablecoins. Coinbase Chief Policy Officer Faryar Shirzad dismissed the banking concerns, stating that the GENIUS Act explicitly permits third-party rewards programs and distinguishes them from issuer-paid interest. “Congress answered this question,” Shirzad wrote, suggesting the banking industry’s letter acknowledges this distinction while attempting to reopen settled legislative intent. Review Process and Industry Implications The OCC is expected to take between 12 and 18 months to review Coinbase’s application, with public comments potentially influencing the agency’s decision. The agency is currently led by Comptroller Jonathan Gould, a former chief legal officer of Bitfury, who has criticized the banking sector’s reluctance to work with crypto companies. Beyond Coinbase, similar opposition from the Bank Policy Institute targets trust charter applications from Ripple, Circle, and Paxos. Anchorage Digital remains the only crypto firm with an approved national trust bank charter, granted in January 2021. Looking forward, the concentrated wave of banking industry resistance shows that traditional financial institutions view crypto firms’ pursuit of federal charters as a fundamental threat to their competitive position in custody and payment services

Author: CryptoNews

2025/11/05

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