Crypto Industry Strongly Opposes Banking Sector's Push to Limit Stablecoin Yields
Several crypto executives and advocacy groups have expressed significant concern over proposed changes to the GENIUS Act that could limit stablecoins' ability to offer yield through third-party arrangements. Such modifications, driven by traditional banking interests, could seriously threaten the U.S.'s position in the global financial system.
The Strategic Importance of Yield in Stablecoins
Noted crypto-friendly attorney John Deaton warned that limiting yield mechanisms for stablecoins could push the market toward China's interest-bearing digital yuan, thereby weakening the U.S. dollar's global dominance.
- This move could accelerate the decline of the dollar as a reserve currency
- Encourage other nations to adopt non-dollar pricing mechanisms
- Challenge the U.S.'s influence in international finance
Regulatory Intervention Without Evidence
The Blockchain Association emphasized that there is currently no evidence that stablecoins undermine the traditional banking system. They argue that such regulatory adjustments are more about blocking competition after bipartisan consensus has been reached.
Alexander Grieve, VP of Government Affairs at Paradigm, added that overturning existing yield arrangements would erase important progress made in the legislative process and damage the fragile trust between the industry and regulators.
Industry Leaders Urge Rational Policymaking
Galaxy Digital CEO Mike Novogratz publicly stated that it would be a serious mistake for the U.S. to roll back stablecoin-related rules under pressure from the traditional financial sector. He urged lawmakers to place greater emphasis on how technological innovation can strengthen national competitiveness.