Strategic Foresight Analysis ::
After the GENIUS Act: Will the future of Western banking converge with Islamic finance?
The End of Interest, the Rebuilding of Finance: Where Do Western Banks Go from Here?
[[[ In the world of stablecoins, banks can no longer benefit from lending ]]]
What the GENIUS Act requires of banks: a shift towards participating in the real economy
[[[ The day the principles of Islamic finance entered into American law, and this caught the attention of Western banks ]]]
[[[This article contains predictive analysis and actual results may differ.] ]]
1. Introduction: Behind the reform of digital currency lies a deeper transformation of the financial model.
In 2025, the US Congress passed the Genius Act, a regulatory bill that may at first glance appear to target only stablecoins. However, at its core, it introduces a structural ban on one of the oldest and most venerable pillars of modern finance: interest (riba).
By prohibiting yields, staking rewards, or negative returns on holdings of stablecoins used in digital payments, the law directly strikes at the traditional banking business model—especially commercial banks whose revenue has long relied on lending capital and collecting interest.
This is a wake-up call. Banks are now required to:
** “Apart from lending and interest, what value do you actually create?” **
2. Traditional banking model: loans + interest
For centuries, the basic function of a commercial bank was simple: collect deposits, lend them out, and earn interest in return.
But the GENIUS Act, with its anti-interest provisions applied to payment stablecoins, invalidates this model both legally and structurally in the digital money ecosystem.
The message is clear:
In a future where currency becomes non-interest bearing, the basic logic of traditional banking becomes obsolete.
3. A proven model: the path of Islamic finance
This may seem extreme in a Western context, but it is not entirely unprecedented.
**Islamic finance** has operated for centuries on the fundamental prohibition** of riba** – the charging of interest.
Instead of making money from money, Islamic banks participate in the economy through risk sharing and real economic activity, using models such as:
* ** Mudaraba **: Profit-sharing contracts between capital providers and project owners.
* **Partnership**: Joint ventures in which profit and loss are shared.
* ** Murabaha **: Contracts to resell assets with a fixed profit margin.
* **Ijarah**: Leasing arrangements instead of interest-based loans
In essence, Islamic finance** requires banks to become active participants in economic productivity**, not just holders of capital collecting rent.
4. GENIUS Act: A Legal Push for Crowdfunding
The GENIUS Act places similar expectations on Western banks. It calls for a shift away from passive interest-based income and toward genuine economic contribution. This signals a major shift in the function of banks, which must now explore:
1) . **To become partners in sharing risks in real economic projects**, rather than just lending capital in exchange for interest.
2) Providing digital infrastructure services – such as safe custody, oracle services, Know Your Customer systems, or compliance frameworks for stablecoins – rather than simply holding deposits.
3) . **Integration into contribution-based ecosystems**, such as the governance of decentralized autonomous organizations or public financial utilities, where rewards are earned through participation and verified service.
4) . **Return to asset-based financing**, using leasing, resale, and performance-based profit generation to create value.
In this emerging system, banks are no longer mere debt-to-monetary machines** **47), but rather partners in value creation – much as Islamic banks have always done.
5. Example of the Pi Network: The interest-free digital economy at work
**Pi Network** already operates according to the assumptions of the GENIUS Law.
Its digital currency, Pi, does not generate interest simply by holding it.
All rewards are earned through active contributions - such as mining, node operation, governance, and participation in utility applications.
Furthermore, Pi Coin is designed as a stable utility token with dual value, combining:
* **PiGCV**, whose value depends on network-wide consensus and purchasing power; and
* **PiUSD**, a stablecoin pegged to fiat currency and designed for foreign trade and payment utility.
This dual system allows Pi to operate internally in a GCV-based microeconomy and externally as a stable, fiat-compatible digital currency—all without offering interest or passive income.
It is a **practical blueprint for an ethical, contribution-based financial system**.
6. Strategic Expectations: The “Islamization” of the banking sector is not an option, but an inevitable outcome.
As digital money systems grow and legal frameworks like GENIUS become the global norm,
Banks will have to follow one of two paths:
* **a) **Learn how to work as partners** in creating value in the real world**,
* **B)** or be **unmediated by decentralized systems**.
In this inevitable transformation, Islamic finance becomes a strategic model that Western banks must adopt – not as a cultural shift, but as a technical and ethical survival strategy.
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Conclusion: The future of Western banking may lie in the past of Islamic finance.
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The GENIUS Act is not limited to regulating stablecoins only.
**Redefining what it means to be a bank**.
“You can no longer survive on interest alone,” he says.
This serves as both a warning and a call for banks to return to real financing, to profit linked to labor, and to service and care instead of speculation and the pursuit of profit.
Whether through the Pi Network sharing economy, the principles of Islamic finance, or the new convergence between the two,
**The bank of the future will be a facilitator of value, not a guardian of debt.**
The only question remaining is:
** Will banks today adopt this role, or will they be replaced by networks that have already done so?