Crypto advocates have different views on things. They claim Stablecoin rewards can create healthy market pressures and may drive large banks to offer more competitive interest rates to keep customers deposited.
“Calling it as a trillion dollar battle would be an understatement: It’s a highly cautious territory for banks to be jealous of,” said Patrick McHenry, a former Republican representative in North Carolina, who served as chairman of the House Financial Services Committee until January 2025.
Coinbase commissioned research predict Bank deposits fell by 6.1% at the maximum. Specializing in community banks, the report did not find a statistically significant impact on stable share growth forecasts. Meanwhile, USDC issuer Dante Disparte, Circle’s chief strategy officer and global policy leader, already has written “Today’s generation of successful stablecoins has increased U.S. and global banking sectors,” he added that the interest ban on Stablecoin issuers represents “a measure to protect the deposit base.”
compromise
In the four years it takes to push Stablecoin legislation to the finish line, most lawmakers in Congress agreed that Stablecoin issuers should not pay interest. “The drafter knows [stablecoins are] Another tool: digital cash, digital dollars, not a security tool that provides returns.
In March, Coinbase CEO Brian Armstrong praised it. On Xhe suggested that customers should be allowed to obtain interest on stable stocks. He likens the arrangement to “a common savings account without the heavy disclosure requirements and tax implications of the securities law.”
The rest of the story – as Ron Hammond put it, who recently represented a well-known crypto industry group, as a senior lobbyist, a well-known crypto industry group – eventually, the banking industry agreed to a deal that included a highly sought-after ban on paying interest on Stablecoin issuers. However, the provision still provides some space for crypto exchanges to provide users with stable monetary incentives to hold. Hammond said some crypto companies want to explicitly allow interest, but famous crypto groups are willing to agree to compromise.
“At the very least, the cryptocurrency world has successfully gained language, which gives them some kind of reward or a reward similar to output,” said McHenry, former chairman of the House Financial Services Committee.
The fact that banking groups are now sending alerts about Stablecoins has frustrated some crypto industry experts. “It feels dishonest to raise concerns about stable rewards at this stage and ignores the widespread debate that shapes genius behavior,” said Cody Carbone, CEO of Digital Chamber, a crypto-centric advocacy and lobbying group. “Throughout the process, banking representatives were fully involved with crypto cake stakeholders, the ultimate language allowed the StableCoin-related rewards offered by exchanges and affiliated platforms, which were the direct product of these discussions.”
Second chance
The crypto industry may be willing to compromise in part because it doesn’t want to spend too much political capital on bills seen as wider crypto regulation. “The crypto industry’s concern is, ‘If we start icing on stable bills, then the simple bills – the chances of our going to go past it are greatly reduced, and then the chances of our entry into the market structure bills approaching zero is zero.”
The bill he refers to is the so-called Clarity Act, which attempts to create a regulatory framework for products and financial platforms operating on blockchain, just like the laws that already govern traditional financial entities such as stock markets, banks and institutional investors. The bill has passed. The Senate version of the bill is expected to be in September. A few days after the signing of the Genius Act, the drafter of the Senate, the Clarity Act publishing Request information ask Whether legislation should limit or prohibit systems such as Stablecoin rewards.
