As regulatory debates intensify in the United States, a specific provision within the proposed stablecoin legislation, known as the GENIUS Act, is sparking a novel bullish thesis for Ethereum. Milana Valmont, founder of the Valmont Group, argues that a potential ban on interest payments for stablecoins could structurally benefit Ethereum in the long term by driving massive capital into its decentralized finance (DeFi) ecosystem.
The core debate in Congress revolves around whether stablecoin issuers, potentially including banks, can pay interest to holders, possibly by passing on yields from underlying assets like Treasury bonds. Valmont contends that this debate itself signifies that stablecoins are transitioning from a "crypto experiment" to a central component of the U.S. financial infrastructure. He highlights that Treasury officials openly discussing moving trillions of dollars onto blockchain is a signal of systemic transformation.
Valmont's key argument is that if stablecoins are legally mandated to offer a 0% yield, capital will seek higher returns elsewhere. "Capital will flow 'like water' to where the highest return is," he states. In this scenario, trillions of dollars in digital dollar liquidity could shift from passive bank accounts to yield-generating DeFi protocols on networks like Ethereum. This would position Ethereum not merely as a payment rail but as a "24/7 global and sovereign capital market."
In such a future, ETH becomes the central value-capture mechanism. Every stablecoin transfer, tokenized asset transaction, and DeFi application on the network consumes ETH for gas fees. With Ethereum's fee-burning mechanism (EIP-1559), increased network activity directly reduces ETH supply, creating a deflationary pressure. Valmont asserts that circulating trillions in stablecoin volume on Ethereum's consensus layer would make ETH even more critical as "digital fuel."
This process could be accelerated by the rise of AI-powered financial agents. Valmont notes that with advanced on-chain identity solutions, autonomous software agents could exploit interest rate differentials in milliseconds, directing capital to protocols like Aave. The gap between 0%-yield stablecoins and positive DeFi rates would create machine-speed arbitrage opportunities, further boosting Ethereum network activity.
On the institutional side, Valmont points to Layer 2 (L2) solutions built on Ethereum as the preferred infrastructure for banks and fintechs. These customizable L2 networks allow institutions to leverage Ethereum's base-layer security while maintaining their own compliance frameworks. He argues that Ethereum's integrated architecture solves the historical problems of liquidity and security fragmentation that plagued earlier "network of networks" visions.
Concurrently, Ethereum is strategically positioning itself to capture the burgeoning AI agent market, projected to reach $236 billion by 2034. According to market data, Ethereum already leads in AI agent deployments, outpacing the second-ranked blockchain by 40%. This first-mover advantage is bolstered by upcoming protocol upgrades like "Strawmap," which focus on improving speed and finality to meet the demands of AI-driven applications.
Market confidence in Ethereum's long-term trajectory appears resilient. This was evidenced when the network's price held steady despite co-founder Vitalik Buterin selling 19,000 ETH at an average price of $2,037. Furthermore, entities like BitMine (BMNR), which holds 4.4 million ETH in its treasury, have publicly backed Ethereum as the network best positioned to capture the AI agent wave.
In conclusion, Valmont's analysis suggests that whether stablecoins pay interest or not, their scaling adoption will increase transaction volume on Ethereum. Combined with its leading role in the emerging AI ecosystem, increased activity could lead to more ETH being burned, tightening supply and potentially creating a powerful bullish scenario for the asset.
