$6T Stablecoin Threat to Bank Deposits

Anthony Leutenegger of Generic Protocol | Alpaca Raises $150M at $1.15B Valuation

Marco Manoppo & Karon Pangestu
January 16, 2026

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Good Morning

Banks are not worried about crypto adoption. They are worried about deposits leaving. Once stablecoins can pay yield, they stop being a payments toy and start touching the core of how banks make money.

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In Today's Email:

What Matters: $6T Stablecoin Threat to Bank Deposits 👀
Founders Highlight: Anthony Leutenegger of Generic Protocol 👨
Deal Flows: Alpaca Raises $150M Series D at $1.15B Valuation 💰️

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Narratives: Yield vs Banks

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WHAT MATTERS

$6T Stablecoin Threat to Bank Deposits

Source: Stablewatch

State of play: Bank of America CEO Brian Moynihan warned that up to $6T in US bank deposits could shift to stablecoins if interest is allowed, equal to ~30% to 35% of total commercial bank deposits.

Moynihan said interest-bearing stablecoins resemble money market funds, with reserves held in short-term assets like US Treasurys rather than bank lending.
A large deposit outflow would force banks to cut lending or rely on more expensive wholesale funding.
In response, a draft crypto market structure bill would ban passive interest on stablecoins while still allowing activity-based rewards tied to staking, liquidity provision, or collateral use.

The proposal has sparked heavy lobbying and controversy:

Coinbase CEO Brian Armstrong said the exchange cannot support the bill, warning it would effectively kill stablecoin rewards.
Meanwhile, Galaxy Research cautioned the draft could significantly expand financial surveillance powers.
With more than 70 amendments filed and growing political pressure, the Senate Banking Committee has delayed its markup as negotiations continue.

Why it matters: This pulls stablecoins out of the niche category and into direct competition with core bank funding, which is why the reaction is so aggressive.

Our take: Stablecoins paying yield break a long-standing banking advantage.

For builders and investors: Design for friction with the banking system, not alignment. Policy risk will define where value accrues.

BUILDER-INVESTOR HIGHLIGHT

Anthony Leutenegger of Generic Protocol

Intro: Anthony Leutenegger is the Founder of Generic Protocol, a protocol designed as a “meta-stablecoin” model that aggregates existing dollars such as USDC, USDT, and USDS and deploys them into onchain markets.

Anthony is also the CEO of Aragon, a modular tech stack for DAOs.

Previous background: Anthony built his background across Web3 governance and institutional fundraising. At Aragon, he progressed from Senior Business Developer to Head of Business Development and Partnerships, and later CEO.

Before crypto, he spent nearly six years at Leysin American School in Switzerland, where he led global fundraising and partnerships.

The big idea: Anthony thorugh Generic aim to realign incentives across the stablecoin stack.

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INSIGHTS

$KAITO Drops After X Cracks Down on InfoFi Apps

X has revised its API policies to ban apps that pay users to post, citing a rise in AI spam and low-quality replies from InfoFi projects. Product lead Nikita Bier said API access has already been revoked to clean up the platform.

Following the announcement, the native token of the InfoFi network Kaito fell more than 10%, later trading around $0.59 and down roughly 14.5% on the day.
Kaito aggregates posts from major crypto accounts on X to track trending narratives. Its FDV previously peaked near $2B after its February 2025 airdrop.
In response, Kaito said it will sunset its incentivized Yaps and leaderboard features and pivot toward Kaito Studio, a tier-based marketing platform.
Founder Yu Hu said past attempts to tighten incentives failed to curb spam, especially as X algorithm changes
and other InfoFi launches worsened content quality across crypto social feeds.

DEAL FLOWS

Alpaca Raises $150M Series D at $1.15B Valuation

Deal flows soared this week - we saw $320M+ in deals 💼

Alpaca announced a $150M Series D led by Drive Capital, valuing the company at $1.15B. The funding will back global infrastructure expansion, product development, regulatory licensing, and TradFi–DeFi integration.

The raise follows a busy 2025 with launches spanning 24/5 trading, fixed income, Instant Tokenization Network, Fully Paid Securities Lending, and Omnibus Subaccounting.
Alpaca also expanded MiCA-compliant crypto infrastructure in the US and EU, announced plans to acquire WealthKernel, and secured memberships with Nasdaq, OCC, and FICC.
Alpaca said its focus will be on execution, infrastructure resilience, regulatory readiness, and operational discipline.

Deal flows in the past week:

KOLect, $1.2M Pre-Seed Round
Neuramint, $5M Seed Round
Meld, $7M Seed Round
Noise, $7.1M Seed Round
Project Eleven, $20M Series A Round
VelaFi, $20M Series B Round
Alpaca, $150M Series D Round
Fogo, $7M Public Token Sale
TBook, $5M Unknown Round
XMAQUINA, $10M Unknown Round
ICEx, $70M Unknown Round

QUICK BITES

State Street expands tokenization push.
Bitcoin ETF inflows reach $1.7B over three-day streak.
House Democrats press SEC over pausing Justin Sun case.
Bank of America CEO warns $6T in deposits could shift to stablecoins.
Senate Banking Committee lawmakers say crypto bill is 'closer than ever.'
S.Korea approves tokenized securities framework in key legislative hearing.
CME adds Cardano, Chainlink and Stellar to growing crypto derivatives lineup.
LSEG launches blockchain-based settlement platform for tokenized deposits.
Kaito token plummets after X revises API policies to ban InfoFi crypto projects.

NOTEWORTHY READS & MEME

Eli5DeFi’s read on What's Next For DeFi Lending?.
Pantera’s read on Pantera Wrapped - A Look Back at 2025.
DeFi Warhol’s read on 50 High-Conviction Crypto Projects to Track.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.