 |
| Stablecoin |
Lobbying Effort to Include Interest Provision in Stablecoin Legislation
Crypto industry leaders are reportedly lobbying the US Congress to allow stablecoin issuers to pay interest to users, according to a report by Reuters and cited by Decrypt.
According to Reuters, the industry is pushing for the inclusion of a provision permitting interest payments in the ongoing legislative discussions concerning stablecoin regulation. Stablecoins maintain their value by being backed 1:1 by real-world assets, such as the US dollar, and these assets are typically invested in low-risk securities like US Treasury bonds. The concept of distributing the interest earned from these investments to users is similar to how traditional deposit accounts function.
Coinbase CEO Brian Armstrong stated, "Stablecoins currently do not have the same benefits as deposit accounts under securities law, such as the ability to pay interest. They should be able to pay interest like regular savings accounts, without excessive disclosure requirements and tax issues."
Currently, two primary bills are under consideration in Congress:
- The "GENIUS Act" (National Innovation and Framework for Stablecoins Act), which has passed the Senate Banking Committee with bipartisan support.
- The "STABLE Act of 2025" (Stablecoin Transparency and Accountability Act), which has been approved by the House Financial Services Committee.
However, the STABLE Act explicitly prohibits issuers from paying interest, while the GENIUS Act remains ambiguous on the matter. Sources indicate that some lawmakers are open to including a provision that allows interest payments.
Conversely, the traditional financial sector strongly opposes this. The American Bankers Association has voiced its opposition, arguing that "allowing interest payments is more than a competitive issue; it threatens the very function of credit intermediation by banks." Their concern stems from the potential for consumers to shift funds from traditional banks to stablecoin wallets if interest is offered.
The inclusion or exclusion of an interest-paying provision in the final legislation is poised to be a pivotal factor in shaping the future of the stablecoin industry.