BlockBeats News: On January 16, according to a report by the Wall Street Journal, the cryptocurrency industry and the banking sector are engaged in a fierce lobbying battle over digital tokens that offer annualized returns. This dispute could potentially derail legislative efforts originally intended to bring cryptocurrencies into the mainstream financial system. The core of the debate centers on the "rewards" claimed by crypto companies—periodic annualized returns distributed to investors in proportion to their holdings. Such mechanisms are particularly common with stablecoins.
In the eyes of banks, companies like Coinbase offering stablecoins with approximately 3.5% returns are essentially equivalent to high-yield deposits, yet they are not subject to the strict regulatory requirements that banks face when accepting public deposits. As a result, banking associations have sent numerous letters to legislators, warning that these "yield-generating stablecoins" could have a devastating impact on small and mid-sized U.S. banks. By contrast, the national average interest rate for regular interest-bearing checking accounts in the U.S. remains below 0.1%. This debate is one of the reasons the Senate Banking Committee postponed its planned vote on a cryptocurrency market structure bill originally scheduled for Thursday.
While major banks such as JPMorgan and Citigroup are resisting stablecoin incentives on one hand, they are also developing their own cryptocurrency products and partnership plans on the other. Some banks, including Bank of America, are considering whether to issue their own stablecoins.
Analysts said that Coinbase's withdrawal of support for the bill could seriously jeopardize its prospects, despite continued backing from other cryptocurrency companies. The dispute highlights a growing tension: on one side, the rising influence of the cryptocurrency industry, which has rapidly expanded in Washington in recent years and is actively leveraging its growing lobbying power; and on the other, the traditional banking sector, which has maintained close relationships with Congress for decades.
The U.S. Treasury estimated last year that stablecoins could potentially draw up to $6.6 trillion in deposits away from the U.S. banking system, partly due to the "yield" mechanisms offered by stablecoins. For comparison, according to the latest data from the Federal Reserve, total deposits in U.S. commercial banks as of early January amounted to approximately $18.7 trillion. The U.S. government provides deposit insurance of up to $250,000 per account, while at the same time imposing strict regulations on banks' business operations and financial soundness.