BLOK-Chain Monthly March 2026

A MYTH

We do not look for founders or CEOs named Michael to lead the companies in the portfolio; however, there are eight individuals named Michael across our portfolio of about 48 companies. These include Michael Saylor (MSTR), Michael Novogratz (GLXY), Michael (Mike) Cagney, founder (FIGR), Michael Tannenbaum, CEO (FIGR), Mike Ho, founder (HUT), Michael Belsche, founder (BTGO), and Michael Dell (DELL). If you are named Michael, please note that this 17% hit ratio is purely coincidental.

MYTH 1
Stablecoins drain bank deposits:

Most of the $300 billion currently represented by stablecoins has originated from abroad, largely from individuals seeking U.S. dollar exposure. Bank deposits, which remain at or near record levels, have not shown material impact, as this demand is typically invested in U.S. Treasury bills. Growth in stablecoins could actually increase demand for Treasuries. Stablecoins are among one of the largest holders of U.S. Treasuries, with countries such as China reducing Treasury purchases, market participants continue to discuss the need for additional sources of demand to support U.S. deficit financing.⁵

• Stablecoins, currently at approximately $300 billion, are often projected to potentially reach trillions of dollars, but they still compete against nearly $8 trillion in assets under management in money market funds. Over nearly 50 years of existence, since 1974, there have been only four quarters in which money market fund (MMF) assets increased while bank deposits declined.

• Similar arguments existed in 1974 when MMF were first introduced. Today, both bank deposits and money market funds have grown, and MMF represents about 42% of the value of aggregate deposits, but this is down from about 52% in early 2000.

• At current levels, stablecoins as a form of digital money tend to compete more with bank deposits, as yield and liquidity are key factors driving force of their added value.

• The concept that the banking system includes both inside and outside money, which helps keep financial flows stable, is important and closely monitored by the Federal Reserve and banks. To this point, at a minimum the fact that reserves are increasing and remain at healthy levels, and that significant funds are parked at the Fed with minimal risk, is often cited as suggesting that the perceived threat is limited.

• Stablecoin transaction volume in 2025 was in the range of $33-$34 trillion, and in January alone it exceeded $10.5 trillion, which, according to Grok, is about three to four times the volume of the combined credit card networks. Momentum has been building, which is often referenced as evidence that the underlying payment rails are functioning smoothly. Notably, approximately 60% of this volume operates on Ethereum.

MYTH 2
It hurts lending

Stablecoin competition won't hurt lending, just bank profits which are enjoying very healthy net interest margins.⁶ Banks could simply choose to compete by paying depositors higher interest rates — the national average savings yield is currently around 0.62%. The question of why should banks not pay depositors fairly for their capital? Arguably it must be nice to have $18 trillion in free de-posits that you can then go against. It is also notable that approximately 17.8% of bank deposits are held at the Federal Reserve, earning a risk-free return of 3.6%. Most importantly, banks provide most of the credit in the system. Wall Street, fintech firms, private equity, and credit unions are all significant sources of credit.

• Banks provide less than 30% of auto-loans.⁷

• Non-bank lenders now account for a majority of the mortgage originations, while banks rep-resent about 30.1%.⁸

• Major financial institutions approve about 26.9% of small business loan applications. In contrast, small community banks and credit unions approve approximately 82% of applications, at least partially. Why? The difference is often attributed to the scale and process, as large banks typically take significantly longer to originate about 4x longer, while non-bank lenders average roughly seven days from application to decision.

MYTH 3
Savers will move money to stablecoins outside the system 

Wrong – this view is often debated, if stablecoins offer yields similar to money market funds and/or Treasuries, the incentive to move away from bank deposits already exists, with and ease of use cit-ed as a potential differentiator. Sure, Millennials and Gen Z are increasingly engaging with the narrative around digital money and crypto, a trend often discussed as part of broader shifts in how these generations think about their capital and savings. Not all savers require 24/7 liquidity, and many alternatives already exist in the U.S., such as Zelle, Venmo, PayPal, and Apple-Pay. Money market funds and high-yield paying liquid pools of capital—whether offered through traditional structures or in tokenized form—are frequently cited as presenting similar challenges for banks.

MYTH 4
Stablecoins will be structured without proper regulatory requirements

Banks operate under extensive regulatory frameworks. Firms that issue or market stablecoins are also subject to regulatory scrutiny, though without the same backstops or support mechanisms provided by the Federal Reserve. As a result, these structures are often discussed as operating under different regulatory considerations—Again, there is no free lunch! Just a fair meal! If coding on crypto follows first-principal rules, with transactions reconciled in milliseconds to minutes, then automation on a blockchain must also operate within proper reconciliation processes and established Know Your Customer (KYC) requirements. For this reason, we believe that the CLARITY Act may help identify a common framework between banks and participants support-ing DeFi protocols.