TLDR
- Stablecoin market reached $300 billion in October 2025, adding $52 billion since the GENIUS Act passed in July
- Traditional banks pay 0.40% interest on savings while stablecoins offer 3-4% yields through DeFi platforms
- PayPal’s PYUSD grew 200% from $800 million to $2.5 billion in three months due to 4% monthly rewards
- US Treasury predicts $6.6 trillion could leave banks as stablecoins gain adoption
- Banking groups want regulators to close affiliate loophole that allows stablecoin yield payments
The global stablecoin market crossed $300 billion for the first time in October 2025. This growth came three months after the GENIUS Act became law in July.
The market added $52 billion in new value since July. Tether’s USDT leads with $177 billion in circulation. Circle’s USDC holds $75.2 billion according to CoinGecko.
Tushar Jain from Multicoin Capital said the GENIUS Act ends banks’ ability to pay minimal interest to depositors. He expects tech giants like Meta, Google, and Apple to launch stablecoins that compete with traditional banks.
Interest Rate Gap Drives Adoption
US banks pay an average 0.40% interest on savings accounts. European banks offer 0.25% according to Stripe CEO Patrick Collison. Stablecoins provide much higher returns.
Tether’s USDT offers 4.02% yield on the Aave platform. Circle’s USDC provides 3.69% through the same service. This 10x difference in rates is pushing depositors toward crypto.
PayPal’s PYUSD showed the strongest growth. The stablecoin supply jumped 117% in one month to $2.5 billion. Since July, PYUSD tripled from $800 million.
PYUSD pays holders 4% rewards monthly. Other yield-bearing stablecoins like BlackRock’s BUIDL and Ethena’s USDe also grew double digits last month.
The GENIUS Act prohibits stablecoin issuers from paying interest directly to holders. However, a loophole lets them offer yields through affiliate partners like crypto exchanges.
Banks Push Back Against Stablecoin Yields
Banking groups asked regulators to close this loophole in August. They argue yield-bearing stablecoins threaten the traditional banking system.
Banks need customer deposits to fund their lending operations. The Bank Policy Institute warned deposit flight would reduce credit creation and increase loan costs.
The US Treasury estimated mass stablecoin adoption could trigger $6.6 trillion in deposit outflows. This prediction came in an April 2025 report.
Jain said banks will need to pay higher interest rates to compete. He predicted bank earnings would suffer as they share more profits with depositors.
Coinbase CEO Brian Armstrong criticized banks for trying to ban stablecoin interest. He called it an attempt to maintain a monopoly. Armstrong said banks should build better products instead of blocking competition.
Tech Giants Explore Stablecoin Launch
Fortune reported in June that Apple, Google, Airbnb, and X were exploring stablecoin issuance. These companies see stablecoins as tools to lower payment fees and improve cross-border transactions.
No announcements have followed since the initial report. The banking lobby continues targeting the CLARITY Act discussions to ban stablecoin yields.
The Treasury Department forecasts the stablecoin market will reach $2 trillion by 2028. This represents 566% growth from current levels.
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