The restrictions on stablecoin yields are under discussion by the US lawmakers as banks contest crypto competition. The discussion indicates a wider battle of determining those that control yields, defend consumer choices and determine the future of the U.S. stablecoin policy.
Can Will Banks Influence Stablecoin Yields in Senate?
Senate Banking staff is believed to have briefed top crypto players on the matter shortly, per Journalist Sander Lutz. According to him, demands of conventional finance companies continue to find a bipartisan welcome. Lutz noted that legislation makers are feeling the pressure to complete a change in the wording of the policy ahead of the upcoming Senate markup.
The push coincides with reports which show that U.S. banks are nearing stablecoin issuance using the GENIUS Act framework. The matter is gaining importance as the Senate discusses an expanded crypto market structure bill. There have been proposed policy negotiations on how rewards on stablecoins might be restricted.
One is to only enable rewards on transactions but not deposits. Another includes restricting yield products to regulated financial institutions. The discussions have brought up some concerns within the crypto sector.
Stablecoin yields are extremely popular on DeFi, trading and crypto-savings products. They usually give better yields as compared to the traditional bank deposits. The report is an indication of a changing tone from the previous negotiations.
Banks Contest Stablecoin Yields in the GENIUS Act
Top crypto voices believe that the move is an indication of increased influence from the banking sector. They caution that stablecoins would lose its attraction among everyday users if there are restrictions on yields.
Crypto lawyer John E. Deaton said the push is a competition battle. Deaton claimed that banks are afraid of losing their customers to better-paying crypto options. He further argued that the restriction on rewards would lessen the choice of consumers seeking suitable financial services.
Also, Deaton associated the debate with the long-standing issues regarding the centralized control of money. According to him, stablecoins disrupt conventional structures by providing timelier payments and access to yields. According to him, banks desire that their users rely on them rather than having rivalries.
Other industry stakeholders believe that the focus of the argument should be on the implementation of the policy. According to critics like Fed Governor Michael Barr, the framework is still immature because the GENIUS Act has no guardrails on stablecoin.
The legislation was aimed at providing the U.S. with a competitive legal framework for stablecoin use. The democrats and the GOP favored it to make the U.S. not lag behind other countries worldwide.
Source: https://coingape.com/genius-act-stablecoin-yields-face-ban-banks-pressures-senate/
