A high-stakes regulatory clash over cryptocurrency rewards is unfolding in the U.S. Senate, with Coinbase’s top policy executive warning that proposed restrictions could undermine the dollar’s global standing. As lawmakers debate the CLARITY Act, a fierce battle centers on protecting the GENIUS Act’s stablecoin provisions, which banks are lobbying to curtail. Critics argue this opposition is less about financial stability and more about shielding nearly $400 billion in annual revenue from new competition, a move that could inadvertently accelerate China’s digital yuan ambitions.
about Crypto Rewards Debate: Banks vs. Stablecoins & China's Digital YuanAmerican Bankers Association
0 in Finance and 0 in Crypto last weekStablecoin Rewards Debate Heats Up Ahead of Crypto Bill Vote
As the U.S. Senate Banking Committee prepares for a pivotal markup vote on crypto market structure legislation, the debate over stablecoin rewards has escalated into a defining battle. Banking groups warn these yield-like payments threaten local lending by drawing deposits away from community banks, while crypto industry leaders counter that they are essential for innovation, customer loyalty, and maintaining U.S. competitiveness against rivals like China. With lawmakers promising regulatory “parity,” the resolution of this issue could determine the fate of the landmark bill and shape the future of digital finance in America.
about Stablecoin Rewards Debate Heats Up Ahead of Crypto Bill VoteBanks Urge Senate to Close Stablecoin Yield Loophole in GENIUS Act
More than 200 community bank executives are calling on the U.S. Senate to strengthen stablecoin legislation, warning that crypto exchanges are circumventing rules designed to protect traditional bank deposits. The American Bankers Association’s Community Bankers Council submitted a letter urging lawmakers to close what they describe as a regulatory workaround. They argue that reward programs on platforms like Coinbase and Kraken effectively pay interest on stablecoins, threatening the lending that fuels local economies across America.
about Banks Urge Senate to Close Stablecoin Yield Loophole in GENIUS ActKraken CEO Defends Stablecoin Yield Against Bank Criticism
Kraken co-CEO Dave Ripley has publicly challenged the American Bankers Association’s opposition to stablecoin yield offerings, igniting a fundamental debate about consumer choice in financial services. The banking lobby argues that crypto exchanges paying interest on stablecoins undermines traditional banks’ community support capabilities, while Ripley counters that consumers deserve freedom to choose where they hold value and access the most efficient financial tools.
about Kraken CEO Defends Stablecoin Yield Against Bank CriticismOCC Chief Dismisses Stablecoin Bank Run Fears
The top U.S. banking regulator has moved to calm industry nerves about stablecoins triggering sudden deposit crises, with Office of the Comptroller of the Currency Chief Jonathan Gould assuring community banks that any material deposit impact would occur gradually and visibly. His reassurances at the American Bankers Association convention come as banking groups intensify pressure on Congress to close regulatory loopholes in the newly enacted GENIUS Act, while the stablecoin market surges from $205 billion to over $302 billion this year.
about OCC Chief Dismisses Stablecoin Bank Run FearsUS Banks Lobby to Ban Stablecoin Yields Amid Deposit Fears
Major US banks are lobbying to reverse provisions in the GENIUS Act that prevent stablecoin issuers from paying interest while allowing crypto exchanges to offer yields on stablecoin holdings. Banking groups argue this creates an uneven playing field that could trigger $6.6 trillion in deposit outflows according to Treasury estimates, potentially raising borrowing costs and reducing credit availability. Crypto industry leaders counter that banks are engaging in ‘rent-seeking’ behavior to protect their low-interest deposit models, noting that traditional banks often pay near-zero interest while crypto platforms provide competitive yields. The conflict has escalated into a Washington lobbying war with banks seeking to block crypto yield offerings and crypto advocates defending the legislation as a carefully crafted compromise that promotes competition and consumer choice.
about US Banks Lobby to Ban Stablecoin Yields Amid Deposit FearsBanks Warn of $6.6T Deposit Flight Risk from Stablecoin Loopholes
Banking associations, including the American Bankers Association and the Bank Policy Institute, are demanding Congress address loopholes in the GENIUS Act that permit stablecoin interest payments through third parties. They warn this could trigger a $6.6 trillion deposit exodus from traditional banks, disrupting lending and raising borrowing costs. Despite concerns, crypto firms like Paxos and Circle are leveraging the Act to pursue national banking charters. Experts argue the immediate risk to banks is low, but clearer regulatory guidance is needed to prevent market instability. The banking coalition also seeks to block non-financial firms from issuing stablecoins and repeal provisions allowing state-chartered issuers to operate nationwide without oversight.
about Banks Warn of $6.6T Deposit Flight Risk from Stablecoin LoopholesBanks Urge OCC to Delay Crypto Firm Charters
A coalition of banking and credit union associations, including the American Bankers Association, has urged the Office of the Comptroller of the Currency (OCC) to postpone reviewing national bank charter applications from digital asset firms like Ripple, Circle, and Fidelity. The groups claim the applications lack sufficient public details to assess the firms’ business models and warn that approval could set a risky precedent. Circle seeks a charter for its proposed ‘First National Digital Currency Bank’ to manage USDC reserves, while Ripple aims to expand into stablecoins with RLUSD. The lobbying effort highlights growing tensions between traditional finance and crypto firms over regulatory oversight.
about Banks Urge OCC to Delay Crypto Firm ChartersUS Banks Urge Regulators to Slow Crypto Charter Approvals
U.S. banking groups, including the Consumer Bankers Association and American Bankers Association, have urged the Office of the Comptroller of the Currency (OCC) to pause approvals for national banking charters for crypto firms like Ripple and Circle. They claim these firms lack fiduciary qualifications and warn that granting charters could create regulatory loopholes, increase money laundering risks, and destabilize the banking system. The associations also criticized the opaque application process, calling for more transparency and extended comment periods. Meanwhile, Ripple’s charter bid has boosted XRP’s price, signaling market optimism, though traditional banks fear crypto’s growing influence in regulated finance.
about US Banks Urge Regulators to Slow Crypto Charter ApprovalsUS Banks Urge OCC to Delay Crypto Firm Licenses
Major US banking and credit union associations, including the American Bankers Association, have urged the Office of the Comptroller of the Currency (OCC) to postpone decisions on bank license applications from crypto firms like Circle Internet Group and Ripple Labs. In a letter to the OCC, the groups expressed concerns that approving these applications would represent a significant departure from current banking policies and raise unresolved legal questions. They argue that the business models of these crypto firms may not align with traditional fiduciary activities expected of national trust banks. The move highlights growing tensions between traditional financial institutions and the expanding crypto sector.
about US Banks Urge OCC to Delay Crypto Firm LicensesUS Banks Used in $44B Pig Butchering Scams
Asian crime syndicates behind pig butchering scams are using major US banks like Bank of America, Chase, and Wells Fargo to launder stolen funds, according to a ProPublica report. The scammers, operating from prison-like compounds in Cambodia, Laos, and Myanmar, exploit victims through fraudulent relationships, siphoning an estimated $44 billion annually. Stolen funds are initially moved through traditional bank accounts before being converted into cryptocurrency and sent overseas. Despite banks’ efforts to combat fraud, black market accounts thrive, with Telegram channels offering rented US accounts to scammers. The American Bankers Association acknowledges the challenge, stating that bad actors often slip through despite rigorous fraud prevention measures.
about US Banks Used in $44B Pig Butchering Scams