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The average American savings account paid 0.38% last month.

The Federal Reserve’s benchmark rate sits near 3.9%, and after Tuesday’s hot inflation report, it’s almost certainly headed higher in December. Year after year, banks collect the gap between those two rates on trillions of dollars of deposits. 

Why? Because moving your money is a chore, so most people never do.

Bankers call these “sticky deposits” – aka deposit inertia. It may be the most valuable asset in American finance, but not one that appears on any balance sheet.

Over the past six weeks, three separate headlines suggest the institutions that depend on that asset are getting nervous.

I bring this up in a week when nearly all of Wall Street’s attention has been on AI stocks, and understandably so. Nov. 5 was the S&P 500‘s worst day since the 2025 tariff selloff. And Nov. 10’s inflation data erased the previous day’s rebound. We believe the worries about AI spending are legitimate, and patience is the right posture on the core data-center trade until the market shows us a bottom.

But being patient on one trade leaves plenty of room to study another. And one of the most interesting stories in the market right now is unfolding in one of the dullest places imaginable: your checking account.

Project Faro: Wall Street’s $270 Million Stablecoin Bet

This week, Bloomberg reported that a group of major banks has pledged roughly $270 million to fund a joint venture code-named “Project Faro.” Goldman Sachs (GS), Citigroup (C), Santander (SAN), and Deutsche Bank (DB) are among those involved, part of a 21-financial-institution consortium that surfaced earlier this year. The plan is to launch a U.S. dollar stablecoin in the first half of 2027, with a euro version to follow.

A stablecoin is a digital dollar that can move instantly, around the clock, without sitting in anyone’s checking account. For a bank, that’s a product designed to make deposits easier to leave.

Banks would only build such a thing if they believed someone else was going to build it first. And someone already has. Open USD (OUSD), a rival stablecoin founded by Coinbase (COIN), Mastercard (MA), Shopify (SHOP), Stripe, and Visa (V), went live this fall. Its network now includes more than 200 partners. Stablecoin-linked spending hit a record $1.17 billion in September. 

Faro is a defensive move. The banks are trying to own the thing that threatens them.

AI Agents Could Make Bank Deposits Far Less Sticky

This month, Britain’s five largest banks – HSBC (HSBC), Barclays (BCS), Lloyds (LYG), NatWest (NWG), and Nationwide – are blocking or restricting AI agents from acting inside customer accounts. 

This comes after JPMorgan (JPM), Citi (C), Charles Schwab (SCHW), and Wells Fargo (WFC) all limited third-party agents that log in with a customer’s credentials.

Their stated reasons are reasonable ones. Nobody has settled who is liable when an agent makes a mistake with your money, and regulators are still writing the rules.

Still, there’s a second reason, and McKinsey put a number on it. The firm estimates that £500 billion to £700 billion of U.K. savings could migrate from deposits into investments over the next decade. Agentic AI could accelerate that shift by making it much easier to compare rates and move idle cash automatically. 

In its survey of roughly 46,000 retail banking customers, 72% of people who already use AI said they would let an agent handle at least one financial task for them.

Think about it: an AI agent never gets bored. It never forgets, and it has no dread of bureaucracy. Tell it once to keep your idle cash wherever it earns the most, and the chore that has protected bank margins for a century simply disappears.

X Money Is Competing for Deposits With Up to 6% APY

The third headline is the only one that didn’t come from a bank.

This summer, Elon Musk’s X began rolling out X Money: an account inside the X app, held at a partner bank, with a Visa debit card attached. It pays a base rate of 4% – more than 10 times the national average – and up to 6% for subscribers and customers who set up direct deposit.

On Oct. 1, New York’s financial regulator ordered X to stop paying interest to customers in the state, citing a missing state license.

This issue is a licensing matter that X says it’s working to resolve. Skeptics have asked how any account can pay 6% when the Fed’s own rate is well below that, and it’s a fair question; the likeliest answer is that X is subsidizing the rate to win customers. Starting Dec. 1, the 6% will apply only to the first $150,000 of a balance. And Massachusetts Sen. Elizabeth Warren has raised questions about the product’s deposit-insurance claims.

Those are real caveats – and also the kind of scrutiny aimed at something incumbents take seriously.

Because look at what X has done in the past 10 weeks. It moved all U.S. creator payouts onto X Money. It dropped the requirement that users pay for a subscription to open an account. And Musk announced that users will soon be able to send a dollar to anyone by holding down the “Like” button. 

Each step pushes real money onto a platform that hundreds of millions of people already open every day.

Stablecoins, AI Agents and X Money Target the Same Bank Advantage

Together, these headlines describe a single threat arriving from three directions.

Stablecoins give money the ability to move instantly, at any hour. AI agents supply something willing to do the moving for you. And a high-yield account inside an app with enormous reach gives that money plenty of places to go.

Any one of those would be a nuisance for a bank. All three combined take aim at the inertia that makes cheap deposits possible.

We’ve seen a version of this before. In the late 1970s, regulations capped what banks could pay on savings at around 5% while market rates soared into the double digits. Money-market funds – a product almost nobody had heard of – grew from a few billion dollars in 1977 to more than $200 billion by 1982. The money left because staying put became too expensive.

That history especially matters right now because the Fed is hiking again. Every increase widens the gap between what cash can earn and what the average bank pays. Savers are being handed a bigger reason to move at the same moment they’re being handed easier ways to do it.

What This Banking Shift Means for Investors

A few observations here.

First, the toll roads look well positioned, whichever side wins. Visa and Mastercard both posted strong third quarters, and both sit beneath the new entrants as well as the old ones. X Money’s card runs on Visa’s network. The card networks also have a seat at the stablecoin table.

Second, distribution is the scarce resource. Building a payments product is easy. Getting a hundred million people to open it every day is hard, and the companies that already have that audience have an upper hand.

Third, the exposure runs the other way for any institution whose earnings lean on deposits that pay next to nothing.

Of course, none of this happens overnight. Banks are powerful, well-capitalized, and adapting; Faro is proof of that. Regulators are active. Promotional yields can be cut. These are themes to study.

Still, a payments platform doesn’t need a gigawatt of power, a zoning board’s blessing, or a bond offering to grow. In a season when the cost of capital is the market’s central worry, that’s a meaningful advantage.

The Bottom Line: Deposit Inertia Is Getting Harder to Defend

For most of this year, the biggest stories in technology have been about building things: chips, data centers, power plants, rockets. 

This one is about moving something that already exists, which is every dollar currently sitting still.

Musk has been circling this idea for a very long time. In 1999, he poured the proceeds of his first company into an online bank called X.com, with the ambition of putting a person’s entire financial life at a single web address. He was pushed out of the company that became PayPal (PYPL) before he could finish the job. Twenty-seven years later, he owns a platform with the audience he lacked back then, and he has said that if it’s done right, X could become “half of the global financial system.”

What I’m confident of is narrower: a project like this can’t be built alone. It needs payment networks, banking partners, and technology suppliers, and those companies are where investors can actually participate.

I’ve been researching which ones matter most. I walk through the full story, and how I’d position for it, in my presentation on X Money.

The banks have told us what they’re afraid of. It’s worth it to understand why.