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Chaos & Order @chaosorderinsight.bsky.social · 1d

10/10 Full analysis of The Triple Lock, regulatory timeline (2021-2025), why competition can't fix this, and what to watch in 2026:
chaosandorderinsight.substack.com/p/why-sony-b...
US chose private franchisees. Europe chose bureaucracy.
The market has spoken.

Why Sony Bank Wants to Be a Bank That Doesn’t Pay Interest

How stablecoin issuers earn 4.5% risk-free while paying customers 0%—and why competition can’t fix it

chaosandorderinsight.substack.com

Chaos & Order @chaosorderinsight.bsky.social · 1d

9/10 The $7B Treasury arbitrage is just the foundation.
Real prize: credit creation.
Stablecoins generated $670B in lending over 5 years. At 10-15% rates with 0% cost of funds, that's $67-100B potential annual revenue.
Double the Treasury arbitrage, same zero-cost capital base.

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Chaos & Order @chaosorderinsight.bsky.social · 1d

8/10 The geopolitical layer:
$155B+ in stablecoin reserves = one of largest sources of Treasury demand outside sovereign nations.
Every international stablecoin transaction strengthens dollar dominance.
Monetary imperialism through private issuers.

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Chaos & Order @chaosorderinsight.bsky.social · 1d

7/10 Usage breakdown shows why most users don't care about foregone interest:
60-70%: Traders holding for hours/days
15-20%: Cross-border payments (speed matters)
10-15%: DeFi users earning
6-10% elsewhere
10-15%: Store of value in currency-unstable countries

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Chaos & Order @chaosorderinsight.bsky.social · 1d

6/10 PayPal launched PYUSD paying 3.7% to compete.
Result: <1% market share ($500M circulation vs. Tether's $120B)
Why? The Triple Lock:
🔒Regulatory prohibition
🔒 Network effects (USDT dominates 82% of trading)
🔒 Self-selected customers (value speed over yield)

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Chaos & Order @chaosorderinsight.bsky.social · 1d

5/10 Why regulators care: If stablecoins paid interest, they'd be securities (SEC oversight kills business model)
Competitive interest would drain deposits from banks
Fed needs banks for monetary policy transmission
In this designed system, private issuers CAN'T compete on yield.

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Chaos & Order @chaosorderinsight.bsky.social · 1d

4/10Here's what nobody's talking about: US law EXPLICITLY prohibits stablecoin interest payments.
The GENIUS Act (passed March 2025) defines "payment stablecoins" as instruments that "do not offer payment of yield or interest."
It's written directly into the regulatory framework.

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Chaos & Order @chaosorderinsight.bsky.social · 1d

3/10 Tether and Circle already do this at scale:
- Tether: ~$120B circulation = ~$5B annual profit
- Circle: ~$35B circulation = ~$1.3B annual profit
That's more than Goldman Sachs earns from trading or JPMorgan from investment banking fees.

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Chaos & Order @chaosorderinsight.bsky.social · 1d

2/10 Sony Bank, Stripe, and Visa are all racing to enter stablecoin issuance.
The model: Earn 4.5% on Treasury reserves, pay customers 0%, keep the spread.
At $10B scale, that's $450M annual profit for essentially accepting deposits and buying Treasuries.

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Chaos & Order @chaosorderinsight.bsky.social · 1d

An ECB official warned this week that stablecoins threaten European banks.
He's right to panic.
While Europe debates CBDCs, US regulators designed a system where private companies earn $7B annually paying depositors 0%.
Thread on The Triple Lock: 🧵 1/10

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Chaos & Order @chaosorderinsight.bsky.social · 6d

Position for parallel systems, not replacement: • Apollo wins (insurance solution) • Infrastructure providers win (loan admin, analytics) • BDCs get destroyed during stress • Traditional banks valuable when opacity becomes liability

Full analysis: open.substack.com/pub/chaosand... (8/8)

Chaos & Order 20: Private Credit's Infrastructure Takeover

Fourth in “The New Money Architecture” series

open.substack.com

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Chaos & Order @chaosorderinsight.bsky.social · 6d

In 2020, private credit marked down 12% while liquid credit fell 35%.

Did illiquidity create resilience? Or just delay price discovery?

The test comes when central banks don't rescue the market. (7/8)

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Chaos & Order @chaosorderinsight.bsky.social · 6d

Default rates tell an interesting story: • Private credit: 1.76% (Q2 2025) • Syndicated loans: 5.2%

Real outperformance? Or mark-to-model masking deterioration? We won't know until a real credit cycle hits. (6/8)

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Chaos & Order @chaosorderinsight.bsky.social · 6d

Apollo solved this. The Venerable insurance acquisition gave them $370B+ in permanent capital from insurance float.

Policyholders can't redeem. Apollo can hold through stress without forced selling.

Everyone else still has the mismatch. (5/8)

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Chaos & Order @chaosorderinsight.bsky.social · 6d

But $1.7T in opaque, illiquid loans creates a fundamental problem: • Assets: 7-10 year illiquid loans • Liabilities: Investors who can redeem anytime

During stress, funds can't sell fast enough to meet redemptions. (4/8)

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Chaos & Order @chaosorderinsight.bsky.social · 6d

Basel III made middle-market lending unprofitable for banks: • Banks: 6-8% ROE after capital requirements • Private credit: 10-15% gross returns, no capital requirements

Regulation didn't just constrain banks. It created a new industry. (3/8)

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Chaos & Order @chaosorderinsight.bsky.social · 6d

Private credit built a $1.7T parallel lending system by solving problems banks couldn't: • 6-8 week decisions vs 6-12 month syndication • Flexible terms vs standardized frameworks • Single decision-maker vs committee approvals (2/8)

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Chaos & Order @chaosorderinsight.bsky.social · 6d

In June 2025, Apollo committed £4.5B to EDF's nuclear projects—largest sterling private credit deal ever.

That same month, they closed a $2.7B insurance acquisition nobody noticed.

The second deal matters more. Here's why: (1/8)

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Reposted by Chaos & Order

Marjorie Nadal @marjorienadal.bsky.social · 12d

Hell no! 🚨 That old nugget...
FT: "Central banks should sell gold bubble"
Reality: CBs are net buyers for 14th consecutive year. China, Russia, India, Poland, Turkey actively accumulating in 2025.
Not thoughtless—strategic. Monetary fragmentation. Zero counterparty risk.
on.ft.com/3KHEm3D

Gold bubble should prompt central banks to sell the metal

The world is a thoughtless prisoner of history when it treats bullion as a desirable store of value

on.ft.com

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Chaos & Order @chaosorderinsight.bsky.social · 20d

8/8 Bottom line: Position for parallel benchmark development, not dollar collapse.

Anyone selling you dollar-collapse headlines is talking politics. Anyone showing you basis spreads is talking money.

Full analysis: open.substack.com/pub/chaosand...

Chaos & Order Edition 19: Commodity Origami

Third in “The New Money Architecture” series

open.substack.com

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Chaos & Order @chaosorderinsight.bsky.social · 20d

7/8 The pattern from previous editions continues:

E17: Family offices bypassing Wall Street E18: CBDCs coexisting with stablecoins
E19: Commodity benchmarks bifurcating

Not replacement. Parallel systems development.

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Chaos & Order @chaosorderinsight.bsky.social · 20d

6/8 Investment implications:

Winners: Vitol, Trafigura, Glencore capturing 2-4% basis spreads; CME/ICE multi-benchmark platforms; physical gold infrastructure outside Western custody

Avoid: Mid-tier traders without scale; dollar-only trade financiers

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Chaos & Order @chaosorderinsight.bsky.social · 20d

5/8 Oil tells a different story: regional fragmentation, not replacement.

Shanghai INE: 50-60M bbl open interest Brent: 750M bbl open interest

During March 2020 stress, Shanghai liquidity collapsed to ~2% while Brent stayed deep.

Derivatives liquidity is winner-take-all.

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Chaos & Order @chaosorderinsight.bsky.social · 20d

4/8 Central banks bought 1,000+ tonnes of gold in both 2022 and 2023—highest annual purchases in modern history.

Not after Russia's $300B reserve freeze. Coincidence? Structural repositioning.

Shanghai gold trades $30-50 premiums during Western banking stress.

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Chaos & Order @chaosorderinsight.bsky.social · 20d

3/8 Gold is genuinely bifurcating—but not how analysts predicted.

Western markets: Paper gold (ETFs, COMEX) as financial asset Eastern markets: Physical accumulation outside dollar system

Different purposes → potentially different prices

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