Simply put
- Stablecoin rewards have become a significant topic in the Cryptocurrency Market Structure Bill.
- A lobbyist pointed out that yield-like payments remain an unresolved issue.
- They mentioned receiving assurances of “equality” from legislators.
The discussion on stablecoin rewards intensified during a Senate Banking Committee meeting. An important vote on the Cryptocurrency Market Structure Bill is scheduled for next Thursday.
After a significant number of community bank leaders expressed concerns, U.S. senators urged for protections for local lending against potential risks associated with stablecoins. However, some notable figures in the crypto sector, including Coinbase’s Chief Policy Officer Fariyah Shirzad, voiced opposition.
Shirzad stated, “Congress already settled this issue with GENIUS, and reopening it as commerce shifts on-chain will only create uncertainty and threaten the future of the U.S. dollar.”
Many influential banks appear to be pushing for a ban on compensation, as they earn significant revenues from deposits with the Federal Reserve and card transaction fees, amounting to over $360 billion each year.
Under the current framework, companies like Coinbase are allowed to offer yield-based payments to customers holding stablecoins. Yet, organizations such as the American Bankers Association argue this practice could harm local communities.
The American Bankers Association’s Community Bankers Council expressed concern in a letter to lawmakers, warning that offering interest and rewards on stablecoins could lead customers to withdraw savings from banks, ultimately risking loans that support local growth.
Cody Carbone, CEO of the Digital Chamber, highlighted that stablecoin rewards are critical to the discussions among lawmakers and need resolution for the bill’s passage.
During a recent three-hour meeting attended by over a dozen pro-crypto senators, it’s unclear what tangible progress was made. Topics discussed included ethics codes, bipartisan representation in cryptocurrency regulation, and various rules tied to decentralized finance (DeFi).
Carbone claimed lawmakers assured him that new rules would foster fairness between banking and crypto industries, preventing any one from having an upper hand.
He remarked that the issue has gained considerable attention, and while it’s premature to declare a winner, everyone is eager to see what solutions emerge.
This Thursday, the Digital Chamber plans to bring about 55 representatives from the crypto sector to Washington, D.C., to meet with more than 20 Senate offices. Carbone noted the group would encompass various stakeholders, including exchanges and DeFi protocols.
The aim is to demonstrate the crypto industry’s strong desire to advance the bill. Last year, pro-crypto Republicans hoped to have it passed by July, but missed several deadlines.
Shirzad has framed stablecoin rewards as a geopolitical concern, pointing to China’s plan to incentivize users of its digital yuan. He cautioned that if lawmakers cap stablecoin rewards, it might give China an advantage.
Ji Kim, CEO of the Crypto Council for Innovation, echoed these concerns, warning that consumer adoption might shift overseas and that the bill’s guidelines could affect the U.S. dollar’s dominance.
“Stablecoin rewards enhance customer acquisition, foster loyalty, promote merchant acceptance, and maintain America’s leadership in stablecoin innovation,” he said.
Carbone mentioned that a clearer understanding of the market structure bill’s wording would be available on Thursday. More broadly, this bill seeks to delineate boundaries between the SEC and CFTC and establish regulations for exchanges and intermediaries.
