Crypto companies challenge the banking sector over restrictions on stablecoin rewards

Source: Yellow Original Title: Cryptocurrency Companies Challenge Banking Sector Over Stablecoin Reward Restrictions

Original Link: https://yellow.com/es/news/empresas-cripto-desaf Challenge-the-Banking-Sector-Over-Stablecoin-Rewards-Restrictions More than 125 industry participants in the cryptocurrency sector are rejecting efforts to expand restrictions on stablecoin rewards through new legislation. The Blockchain Association coordinated the opposition letter sent on Thursday to the Senate Banking Committee.

Signatories include the Bitcoin Policy Institute, Crypto Council for Innovation, DeFi Education Fund, Solana Policy Institute, the Digital Chamber, along with major companies such as a16z Crypto, a compliance platform, Gemini, a trading platform, and Ripple.

What happened: legislative dispute

The GENIUS Act, signed into law by President Trump on July 18, established a federal regulatory framework for dollar-backed digital tokens known as stablecoins. The legislation prohibits stablecoin issuers from offering any form of interest or yield.

Banking industry groups now argue that this prohibition should be extended to other entities that provide rewards to stablecoin holders. They describe platform rewards as a “loophole” that conflicts with Congress’s intent.

Summer Mersinger, executive director of the Blockchain Association, states that reopening the issue before rulemaking begins “simply makes no sense.” She questioned the certainty provided by legislation if Congress can immediately revisit enacted laws.

The industry letter argues that Congress intentionally preserved the ability of platforms and intermediaries to offer legal rewards while prohibiting issuers from paying interest.

“The Congress prohibited stablecoin issuers from paying interest or yields to stablecoin holders, while intentionally preserving the ability of platforms, intermediaries, and other third parties to offer legal rewards or incentives to consumers,” the letter says.

Why it matters: competition concerns

Banks fear that reward programs could lead to deposit outflows, potentially reducing the capital available for loans. Some estimates cite possible withdrawals of up to $6.6 trillion from the traditional banking system.

The cryptocurrency industry questions these projections. A July 2025 analysis by Charles River Associates found no statistically significant relationship between stablecoin adoption and deposit levels at community banks.

Industry representatives argue that approximately $2.9 trillion in bank reserves currently earn interest at the Federal Reserve rather than funding loans.

“Opposition to stablecoin rewards reflects the protection of incumbents’ revenue models, not security and soundness concerns,” the letter states.

Democrats acknowledged concerns about interest payments that could drain deposits from the banking system. They indicated that Congress could develop solutions that protect banks while allowing rewards and incentives.