💵 Arthur Hayes on Stablecoins: The Battle Isn't Over the Tech — It’s the Distribution

Stablecoins won’t die — but who controls them will decide who wins. Arthur Hayes just dropped a sharp analysis on the real game: access, not innovation.

🏦 Banks Won’t Save Stablecoins

Hayes says don’t expect banks to go all-in on USDC or USDT.

Why?

🌐 Global banks like JPMorgan deal with local regulations 📑 No universal policy = no global stablecoin rollout 🏗️ Most banks will build in-house stablecoins — no external partners allowed

So if you’re a new issuer? You’re not getting through the front door.

💸 Tether's Dirty Secret: No Interest, Big Profits

Tether (USDT) is still king for one reason: it never pays users interest.

Meanwhile, it earns fat yields from U.S. Treasuries — pure net interest margin (NIM).

🧠 Key edge:

• Built around Bitfinex
• Global reach with zero user incentives
• Didn’t pay for listings. Everyone listed them anyway

It’s not DeFi. It’s distribution dominance.

🪙 Circle Tried to Compete — Had to Split Revenue

Circle (USDC) had no home-field advantage. It had to pay exchanges for listings — until Coinbase bailed them out.

🤝 Now, Coinbase takes half of Circle’s interest income 🪙 USDC = bank-grade tech, but weaker reach and lower margins

And the road for new issuers? Even worse.

🔒 Newcomers Are Locked Out

Hayes’ warning is blunt:

• 🏦 Banks won’t partner — they’ll build their own coins
• 📱 Social apps (like Telegram, PayPal) are taking over retail channels
• 💰 Newcomers will need to bribe users with interest or airdrops
• 📉 Most won’t make it — margin death spiral incoming

📈 Is There Any Upside?

Yes — if regulations shift:

💥 A regulatory unlock could drive the stablecoin market to 2T+ ⚖️ If issuers are allowed to operate like banks, margins improve 👀 For now: it’s still a high-risk, high-reward game

Hayes: “The music is playing — we dance. But when it stops, it’s over fast.”

🧭 TL;DR

🏦 Banks won’t scale existing stablecoins — they’ll build their own 🧱 Distribution, not tech, is the real moat (Tether proved it) 🤝 Circle had to split revenue with Coinbase to survive 🧨 New issuers face brutal economics, locked-out channels 📊 Stablecoins could still 10x — but regulation is the key

The best stablecoin won't win. The best distribution will.