“Bye-Bye Circle”: Arthur Hayes Warns of Wall Street’s Stablecoin Takeover

• Arthur Hayes warns that a joint stablecoin venture by major US banks could spell the end for Circle’s USDC dominance.
• The GENIUS Act opens the door for regulated bank-issued stablecoins, threatening crypto-native projects.
• A banking-backed stablecoin could shift stablecoins from decentralization to institutional control.

Arthur Hayes, the co-founder of BitMEX and a long-standing voice in the crypto market, issued a warning for the future of Circle’s USDC. Reacting to reports that Wall Street’s biggest banks are teaming up for a stablecoin initiative, Hayes wrote, “Bye bye Circle. Thanks for playing.” 

This characteristically sarcastic statement from Hayes throws a harsh spotlight on a major realignment brewing within the stablecoin space; one that could soon pit legacy finance heavyweights directly against the very crypto-native players that helped bring stablecoins into the mainstream.

Wall Street Titans Reportedly Plan Joint Stablecoin as GENIUS Act Nears

According to reports, the titans of traditional finance – JPMorgan Chase, Bank of America, Citigroup, and Wells Fargo – are exploring the development of a jointly issued stablecoin. The timing is no coincidence as the GENIUS Act, a bipartisan bill setting regulatory standards for stablecoins, is nearing passage in the United States Senate. 

The legislation would establish clear guidelines for both banks and non-bank issuers while restricting stablecoin issuance by public companies outside the financial sector. The banks’ proposed venture is still in the conceptual phase, but their entry could fundamentally alter the existing dynamics of the stablecoin market. 

Related: Ripple-Backed USDB Stablecoin Goes Live on XRPL for Cross-Border Payments in Latin America

By creating a fully compliant, bank-backed stablecoin designed for efficiency in cross-border transactions and faster settlements, Wall Street could appeal to regulators and corporations wary of the perceived risks of current market leaders like USDC (Circle) and USDT (Tether).

Hayes: Bank-Backed Coins Could Eclipse Crypto-Native Issuers Like Circle

Arthur Hayes’ pointed remark reflects more than personal opinion–it echoes growing concern in the crypto community that decentralized pioneers like Circle may be eclipsed by well-capitalized, regulation-savvy institutions. 

Circle, which issues the USDC stablecoin, is reportedly in sale discussions with Coinbase and Ripple. This coincides with USDC’s slight depegging–a slip to $0.9987–likely caused by market unease surrounding the growing momentum behind Wall Street’s stablecoin plans. 

Related: Trump-Linked USD1 Stablecoin Reaches $2.1 Billion Cap, Lands Binance Listing

Hayes sees these signals as the beginning of an existential threat to Circle, whose dominance hinges on its vast integration across DeFi platforms and crypto-native liquidity networks.

Notably, the transformation is already visible globally. Hong Kong just passed legislation mandating full-reserve backing and licensing for stablecoin issuers under its central bank’s oversight. 

The policy is being hailed as a global benchmark–and it aligns closely with the approach now being taken by US lawmakers through the GENIUS Act. For banks, this legislative clarity provides the green light to plunge into the stablecoin market with confidence.