Svmuu reports, on the eve of a key vote by the U.S. Senate Banking Committee on comprehensive cryptocurrency legislation, American Bankers Association (ABA) CEO Rob Nichols sent an urgent letter to bank executives, calling for immediate contact with senators to push for amendments to stablecoin-related clauses.
Nichols warned that the current draft fails to effectively prevent crypto companies from attracting stablecoin deposits through "interest-like rewards," which could lead to a large-scale migration of bank deposits to stablecoins, thereby threatening economic growth and financial stability. In the letter, he stated this is "an urgent advocacy battle requiring immediate action."
The bill was originally intended to establish the first federal unified regulatory framework for the crypto industry and clarify the responsibilities of various regulatory agencies. However, the controversy surrounding stablecoin yields continues to be one of the core legislative obstacles. The banking industry worries that although the relevant framework passed last year under the GENIUS Act prohibits issuers from directly paying interest, it still allows platforms to offer yields in the form of rewards, thereby weakening the funding base of the banking system.
After multiple rounds of negotiations, bipartisan senators proposed a compromise: prohibiting "regulated entities" from providing interest or equivalent benefits to token holders in any form, while allowing reward mechanisms based on transaction or usage behavior. However, banking groups subsequently raised objections, arguing that the wording contains "circumvention loopholes." For example, providing fixed rewards based on holding size could be seen as a form of disguised interest.
Currently, the Senate Banking Committee is expected to review and vote on the bill this Thursday. The regulatory boundary surrounding the stablecoin yield mechanism remains one of the biggest points of contention. (The Block)