Major Banks Set to Unveil Stablecoins
“You parking a hundred million USDC in your account and not being able to get access to the treasury rate is quite expensive,” said Sam MacPherson. “This is 3.6% per year. And so this is like $3.6 million you’re losing per year.” That figure encapsulates the entire proposition. MacPherson utilised the same dialogue to reveal that Spark is incorporating its Spark Savings product into BitGo, the largest independent digital asset custodian, which made its public debut on the NYSE in January and managed approximately $104 billion in assets for over 1,500 institutional clients at the time of its IPO filing. “The users on BitGo who are holding USDC or USDT, they’re able to start earning a yield on that idle capital,” MacPherson said. “This is a common problem in custodians, exchanges, where users will be moving around funds, but they’ll just leave it in a particular spot.” Big allocators have largely observed DeFi from the sidelines due to a significant operational challenge: transferring funds from a regulated custodian to a smart contract presents a compliance headache that most treasurers are unwilling to tackle. The BitGo integration is limited. It allows the stablecoin to generate earnings while remaining in qualified custody.
Spark possesses a balance sheet that lends credibility to that assertion. It is a sub-DAO of Sky, the protocol formerly known as MakerDAO, and concluded May with approximately $6.4 billion in its Savings product and $3.4 billion in its SparkLend market. Its stablecoin, USDS, ranks as the third-largest in the market, boasting approximately $8.7 billion, trailing only Tether’s USDT and Circle’s USDC. MacPherson refers to the product being integrated into BitGo as a treasury tool, rather than a yield farm. “It’s designed for you to be able to withdraw with no notice at any time,” he stated. A bank maintains approximately a 10% cash reserve in relation to its deposits. Sky runs much higher. “Sky is maintaining more on the order of fifty, sixty percent,” he stated. “You depositing five hundred million and then withdrawing it three days later with no warning, not a problem. So we’re one of the only protocols that can do that.” Spark presents itself as more of a bank than a conventional DeFi application, and this is intentional. In 2022, MakerDAO underwent a significant transformation, rebranding itself as Sky and splitting into two distinct entities. “Sky is similar to a central bank in that it just provides liquidity,” MacPherson stated. It’s failing to fulfil its role of venturing out into the world and putting that capital to work. This is the responsibility of the sub-DAOs, or the commercial banks, to engage in lending, credit, and to effectively structure the deals that link with the end borrower. Spark was the pioneer among those commercial banks. It has officially launched the lending market, SparkLend, as part of its new structure.
The yield originates from several sources. There is Treasury-bill exposure on the stablecoin reserves, onchain crypto-backed loans, and an off-chain desk operated with Anchorage Digital Bank, the federally chartered crypto custodian, which allows borrowers to post Bitcoin in regulated custody. The point, MacPherson stated, is to “remove as much of the intermediaries, middlemen, as possible,” and to achieve “the most efficient possible mechanism for delivering yield from the end borrower to you as a depositor.” His critique of the banks is embedded in the framework: “Unlike banks, which you have money in your deposit account, they don’t pay you anything.” In February, Spark also launched Spark Prime, a prime broking designed specifically for the basis trades that crypto hedge funds utilise to generate yield. It maintains control over the borrowed funds. “Spark Prime acts as a master account on all of the exchanges, the qualified custodians, even the newer venues like Hyperliquid,” MacPherson stated. “If they ever find themselves in a position that’s too risky, Spark Prime’s risk controls have the capability to liquidate those positions and retrieve the funds.” The risk model is derived from banking. “Within the Sky ecosystem, we do follow a Basel-inspired framework, which is actually the same risk framework that banks use,” he said.
“We’ve already seen that the banks have been quite resistant about forwarding yield on stablecoins,” MacPherson said. “It’s precisely because they want to keep their high margins from depositors in banks. This is going to open up competition, and I think it’s quite clear they don’t want this.” He is detailing an actual clash in Congress. The GENIUS Act, the stablecoin law signed by President Trump in July 2025, prohibits stablecoin issuers from offering interest to holders. It does not prevent third parties. Exchanges and DeFi protocols continue to offer yield on stablecoins they haven’t issued, highlighting the opportunity that Spark and BitGo are capitalising on. The primary lobby of the banking sector is pushing for its closure. “Banks power the economy by turning deposits into loans,” the Bank Policy Institute wrote in August. “Incentivising a shift from bank deposits and money market funds to stablecoins could lead to higher lending costs and a decrease in loans available for businesses and consumer households.” MacPherson believes the banks are engaged in outdated strategies. “It’s not a matter of whether this is going to happen. It’s akin to when,” he stated. He even speculates on who funds the opposition. “I wouldn’t be surprised if some of this anti-crypto stuff comes from there,” he said, referring to the banks. The next round runs through the CLARITY Act, the market-structure bill that cleared the Senate Banking Committee in May with its own contested language on how far crypto firms can pay. “We’re strongly of the opinion that every major bank is going to launch a stablecoin in the near future,” MacPherson said. He put the current stablecoin market at “around 300 billion” and expects it to “10x to 3 trillion in the next couple of years.” That sits inside Citi’s range of $1.9 trillion to $4 trillion by 2030.
He is not the only one making moves around that wager. Marc Boiron, chief executive of the blockchain network “Polygon, has directed his entire focus towards stablecoin payments. Polygon is just a payments focused chain,” Boiron stated during the On The Margin podcast. To him, the pressure on governments is competitive. Countries “can’t be competitive in a global environment when all the other countries are enabling stable coins to flow seamlessly around the world and they’re not,” he said. “We just want to be this go-to yield on top of the existing stablecoins,” he said. He envisions an individual utilising an app to hold USDC, Ripple’s RLUSD, or PayPal’s PYUSD, effortlessly earning on their assets by default. Regardless of whether institutions arrive ahead of retail, the BitGo pipeline serves as the benchmark. Currently, the yield is minimal. It is driven by the demand for crypto lending and the basis spreads that tighten when trading activity diminishes. “The crypto markets are quite dead” right now, MacPherson said, which is why the rates are low. The same pipe that allows institutional money to flow in also facilitates a swift exit, which he asserts is the objective. “You want to park your funds and then you need to use it at a moment’s notice,” he said. “There’s no locking period.”
