Ethereum Co-founder Joseph Lubin Warns US Banking System Could Face A ‘Greek-Style’ Reckoning

Joseph Lubin warned that traditional finance was fragile, with weakening currencies and rising trust issues, and pointed to Greece-style economic collapse for traditional banks as DeFi grew.

• Lubin said decades of rising debt and leverage had made the traditional financial system fragile and vulnerable to shocks.
• He warned that fiat currencies had been steadily losing value, reducing people’s purchasing power.
• Referring to Greece during the Global Financial Crisis, he said bank deposits could face sudden losses or restrictions during a crisis.
• He argued that DeFi had matured and could expand further if the United States provided clear regulations.

On Wednesday, Ethereum (ETH) co-founder and Consensys CEO Joseph Lubin said the traditional financial system is entering a “dangerous” phase, warning that macro fragility, currency debasement, and declining trust could expose savers to crisis-style losses.

Ethereum (ETH) was trading at $1,958.87, down 2.57% in the last 24 hours. On Stocktwits, retail sentiment around ETH remained in the ‘bullish’ territory, as chatter remained at ‘high’ levels over the past day.

Speaking at Consensus Hong Kong 2026, Lubin said the world was nearing the end of a “roughly 80-year monetary and debt and generational supercycle,” which he described as decades of expanding credit, rising leverage, and repeated monetary stimulus that shaped the modern financial order.

He added that “the world was collapsing” and that the current system “no longer served the people of the world well,” arguing that accumulated debt and structural imbalances had made traditional finance increasingly fragile and more exposed to shocks.  High debt and structural imbalances, he suggested, would increase the risk of crisis as the long cycle unwinds. 

The International Monetary Fund (IMF) concluded that stablecoins can help the U.S. government raise capital by making T-bills more attractive to global investors. This would strengthen the dollar and increase front-end liquidity. 

Bank Bail-In Risk In The Next Financial Crisis

Another risk he stated was currency debasement. He contrasted DeFi with “bank accounts and money which is being debased around the world,” and argued that nation-state currencies have been steadily losing value.

Referring to Greece during the Global Financial Crisis, where GDP collapsed, Lubin pointed to bail-ins and haircuts as another risk. “You wake up in the morning in Greece, and you’ve lost 25% of your purchasing power,” he said. He used the example to show how, during a crisis, bank deposits can suddenly lose value or become restricted, leaving ordinary savers to absorb the losses.

Loss Of Trust In Traditional Banking Systems

He then pointed to a “loss of trust in centralized systems,” including governments and major financial institutions. He added that even with the loss of trust, people still rely on them, making the system brittle and politically fragile.

Lubin argued “DeFi is now roughly as safe as traditional finance,” offering yields of “4% or 6%.” He added that assets like Bitcoin (BTC) and Ethereum have moved “up and to the right” over time. When viewed on a long-term chart, despite short-term volatility, these assets have shown steady growth, which he believed strengthened the case for decentralized alternatives.

Lubin said U.S. legislative clarity could open the “floodgates” for institutional participation in DeFi, which would enable banks and large firms to lend, borrow, and deploy capital on-chain with greater confidence. 

Read also: Ex-Binance CEO CZ Says Crypto Has Already Lived Through Its ‘Darkest Quarter’

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