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The clash between Wall Street and crypto intensifies as banks warn yield-bearing stablecoins could drain trillions from the U.S. banking system. The GENIUS Act’s loophole allowing third-party yield payments has become a regulatory battleground. Crypto advocates argue yield is essential for competition and innovation.
- Banking groups warn yield-bearing stablecoins could cause $6.6 trillion in deposit flight from US banks, threatening credit availability
- Crypto industry argues yield prohibition would freeze innovation and disadvantage US firms in global competition
- The GENIUS Act prohibits issuers from paying yield directly but allows third-party arrangements through exchanges
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Related Tags: Circle Coinbase Global Inc. Stablecoin