💸 When someone promises to pay you back "and then some"...

Money deposited in a bank usually doesn’t just sit there. Banks can lend out idle $$ and offer their customers interest payments on deposits. Crypto lenders proposed a similar model, attracting deposits by advertising "yield" — (in)famously as high as 18% — on deposited crypto. Now, as crypto lenders topple, some customers are [struggling](https://www.ft.com/content/64648e10-cc09-4304-a274-87b66d37d3bc) to get their deposits back.

DEFI(NE)

Jennifer Cardenas

Heard on the Block: "crypto yield"

__Forgetting the CVV digits…__ Big banks are joining forces to [launch](https://www.wsj.com/articles/banks-plan-payment-wallet-to-compete-with-paypal-apple-pay-11674433472) a digital wallet that could rival __[Apple Pay](https://robinhood.com/stocks/AAPL/)__ and __[PayPal](https://robinhood.com/stocks/PYPL/)__ and allow their 150M+ card holders to check out online *without* grabbing their plastic. Banks have teamed up before: in 2017 __[JPMorgan Chase](https://robinhood.com/stocks/JPM/)__, __[Wells Fargo](https://robinhood.com/stocks/WFC/)__, __[Bank of America](https://robinhood.com/stocks/BAC/)__, and others launched peer-to-peer payment biz Zelle — which surprisingly moves more $$ than Venmo and Cash App *combined*. Now…

- __Same squad:__ Big banks are planning a digital wallet that’ll be run by Early Warning Service, the bank-owned company that runs Zelle.
- __Fresh wad:__ It’ll start as an online checkout option (with a physical card for in-store purchases), but could eventually work as a swipe-less wallet à la Apple Pay.

__Tap-to-pay anxiety…__ Banks are wor­ried about los­ing customer loyalty as companies like Apple and PayPal promote their own financial products (Apple’s even working on a savings account with __[Goldman Sachs](https://robinhood.com/stocks/GS/)__). Apple Pay has surged in popularity since its 2014 launch: an estimated one in six US consumers uses it at least once a month. Meanwhile, __PayPal__ has 400M+ global users and controls over a third of the online payment market share. 

No wallet, no problem (Duane Prokop/Getty Images)

Swiped

__If you can't beat ’em, join ’em…__ or at least launch a competing product. With deal revenue shrinking, it’s more important than ever for banks to keep their retail customers loyal — especially at the digital checkout aisle. Over half of US consumers tried a new payment method last year, with many using digi-wallets for the first time. The global contactless payment market is forecast to quintuple by 2030. 

Big banks plan a digital wallet to rival Apple Pay as plastic-free payments take over

__More like terminus…__ One of the last big crypto lenders standing officially threw in the towel. __Genesis__, part of the __DCG__ crypto conglomerate, [declared](https://www.bloomberg.com/news/articles/2023-01-20/crypto-lender-genesis-seeks-quick-exit-from-bankruptcy) bankruptcy late last week with plans to get the restructuring ball rolling by May. The goal: break itself apart and sell the pieces to repay creditors — of which there are plenty. 

- __Towering:__ __Babel Finance__, which offers mining and crypto-lending services, says Genesis owes it $150M. 
- __Gemin-high:__ The Winklevoss-helmed crypto exchange __Gemini__ says Genesis owes its customers $900M. It also [reportedly](https://www.theinformation.com/articles/gemini-is-laying-off-10-of-staff-marking-latest-blow-for-winklevoss-crypto-startup) announced job cuts yesterday.

__The end of a chapter…__ and the beginning of Chapter 11. Genesis was a major player in the crypto-lending world, lending out $130B+ in 2021 alone. Cracks appeared when crypto hedge fund __3AC__ collapsed in July, taking $1.2B of Genesis' funds with it. __FTX's__ November implosion, which jolted the market, widened those already deep fissures. Now Genesis follows __Celsius__, __Voyager__, and __BlockFi__ into bankruptcy. 

Chapter

__Crypto lending's “Wild West” days could be over…__ For years crypto lenders acted like banks — lending out customer deposits — but without the same regulations and controls that banks are subject to. As high-profile bankruptcies pile up, regulators are cracking down. The SEC charged Genesis with offering unregistered securities this month, and lenders like __Nexo__ are paying multimillion-dollar settlements. Experts say that to stage a comeback crypto lenders will need to up their risk-management game — or risk going the way of the cowboy.

Genesis follows other crypto lenders into bankruptcy, signaling the end of crypto lending as we know it 

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Heard on the Block: "crypto yield"

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