As debates continue in the cryptocurrency sector surrounding stablecoin regulations, the “interest” controversy surrounding the GENIUS Act has sparked a new debate.
Milana Valmont, founder of Valmont Group, argued that banning interest payments on stablecoins could create a structural bullish scenario for Ethereum in the long term.
In the US, a bill progressing through Congress is generating intense debate over issues such as whether stablecoin holders will receive interest and whether banks will be able to pass on Treasury bond yields to users. According to Valmont, however, this debate itself shows that stablecoins are no longer just a “crypto experiment” and are becoming central to the US financial infrastructure. He notes that the fact that Treasury officials are openly discussing moving trillions of dollars onto the blockchain is a sign of systemic transformation.
Valmont’s key point is that if stablecoins are legally unable to pay interest, capital will not remain idle. According to Valmont, capital will flow “like water” to where the highest return is. If digital dollars are condemned to 0% return, trillions of dollars in funds could shift to decentralized finance (DeFi) protocols instead of passively sitting in banks. In this case, Ethereum could position itself not just as a payment infrastructure, but as a 24/7 global and sovereign capital market.
In this scenario, $ETH is at the heart of the value capture mechanism. Every stablecoin transfer, every tokenized asset, and every DeFi application on the Ethereum network operates using $ETH. Thanks to transaction fees and the burning mechanism, the supply of $ETH can shrink as network activity increases. According to Valmont, the fact that trillions of dollars worth of stablecoin volume circulates on Ethereum’s consensus layer will make $ETH even more critical as “digital fuel.”
Valmont also argues that the process could be accelerated with the introduction of AI-powered financial agents. He notes that thanks to next-generation standards and on-chain identity solutions, autonomous software agents could detect interest rate differentials in milliseconds and direct capital to protocols like Aave. He states that the gap between stablecoins offering 0% yield and positive interest rates in DeFi could create machine-speed arbitrage opportunities.
On the enterprise side, Layer 2 (L2) solutions are coming to the forefront. Valmont notes that banks and fintech companies are preferring customizable L2 networks built on Ethereum rather than operating on a single chain. This model allows institutions to benefit from the security of the mainnet while maintaining their own compliance and regulatory frameworks. Valmont recalls that the “network of networks” vision has been attempted by various projects in the past, but struggled to attract global capital due to liquidity and security fragmentation. He argues that Ethereum solves this problem with a more integrated architecture.
In conclusion, according to Valmont, the discussion shouldn’t be reduced solely to stablecoin interest rates. Whether stablecoins pay interest or not, transaction volume on Ethereum will increase as scale grows. Increased activity could mean more $ETH burning and a tighter supply.
*This is not investment advice.