The American Bankers Association is basically putting out a “Dear Congress” letter, begging them to ban stablecoin yields before the midterms. You know, just your standard plea for survival in the cutthroat world of finance.
On Tuesday, the ABA released their fancy 2026 policy priorities list, and guess what? Stablecoin oversight is at the very top. They’re like, “Hey lawmakers, let’s make sure payment stablecoins don’t turn into deposit substitutes by banning interest, yield, or any rewards on these shiny tokens.” Because who needs innovation when you have boring old banks?
Meanwhile, Congress is busy drafting crypto market structure legislation like it’s an IKEA assembly manual, trying to get everything just right before the November 2026 elections. And banks are like kids at a candy store, ready to act!
Banks Warn of $6 Trillion Deposit Flight
Bank of America CEO Brian Moynihan sounded the alarm recently, claiming that up to $6 trillion could skedaddle from traditional banks if stablecoin yields stay legal. That’s right, folks, we’re talking about enough money to buy a small country-or at least a really fancy yacht.
The ABA insists that community banks will be the ones crying in their coffee. Without deposits, they can’t fund mortgages or small business loans. They’re framing this as a critical financial stability issue, not just a thinly veiled attack on innovation. Classic deflection!
On January 14, over 3,200 bankers signed a letter to the Senate, demanding some serious action. They want yield bans to cover not just stablecoin issuers but also crypto exchanges and their shady affiliates. Why? Because a loophole in the GENIUS Act still lets yield payments slip through like a toddler sneaking cookies before dinner.
Circle CEO Calls Concerns “Totally Absurd”
But hey, not everyone is on the bank-wagon.
Circle CEO Jeremy Allaire decided to throw cold water on the bank run narrative at Davos. He said, “They help with stickiness, they help with customer traction,” defending stablecoin yields as a secret weapon for adoption. Talk about a pro-stablecoin cheerleader!
And then there’s Anthony Scaramucci from SkyBridge Capital, warning that banning yields might backfire spectacularly. He pointed out that China’s digital yuan already offers yield, meaning our beloved US dollar could end up looking like the last kid picked for dodgeball if American stablecoins can’t compete. It’s a real nail-biter!
What Happens Next
The saga of the stablecoin yield is causing quite the ruckus on Capitol Hill. Just last week, the Senate Banking Committee had to postpone a key markup after Coinbase pulled its support faster than you can say “oops.”
As lawmakers gear up for a final vote, the fate of digital dollars hangs in the balance. Will they be able to strut their stuff alongside traditional bank deposits, or will they be stuck playing by the bank-friendly rules? Only time-and perhaps an overly dramatic Senate hearing-will tell!
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2026-01-23 14:29