ABA Sets Stablecoin Yield Crackdown as Top 2026 Priority
The American Bankers Association (ABA) has made restricting stablecoin yield a primary objective for 2026 as Congress considers crypto market structure legislation ahead of the midterm elections. ABA’s goals and policy priorities can be found in depth on their official release here.
In a statement on Tuesday, the ABA listed among its priorities the goal to “stop payment stablecoins from becoming deposit substitutes that slash community bank lending by prohibiting paying interest, yield or rewards regardless of the platform.”
Stablecoin oversight led a set of five priorities that also included combating financial fraud, opposing arbitrary interest rate caps, and emphasizing indexing and mission-driven banks. ABA CEO and President Rob Nichols said the agenda reflects input from banks and businesses across sizes and models. For live updates and responses, followers can visit ABA’s official Twitter feed.
Bank CEO warns up to $6 trillion could exit banks
The central dispute between the banking lobby and the crypto sector is whether interest-bearing stablecoins could divert deposits from traditional banks, potentially weakening lending and diminishing banks’ role in the financial system.
Bank of America CEO Brian Moynihan said earlier this month that as much as $6 trillion could move out of banks and into stablecoins that pay interest. You can share this article with others on your social media platforms Facebook, Twitter and Telegram by clicking on the respective links.
While the GENIUS Act, enacted last year, bars stablecoin issuers from paying interest or yield to holders, the ABA’s Community Bankers Council wrote to lawmakers in early January warning that a perceived loophole could still allow yield-bearing stablecoins to undercut traditional banks.
Circle CEO calls concerns “totally absurd”
The Community Bankers Council urged the Senate to include provisions in market structure legislation that would tighten stablecoin rules to prevent issuers from offering yield through third parties.
Executives in the crypto industry argue that permitting stablecoin yields would be beneficial overall.
Circle CEO Jeremy Allaire dismissed the prospect that stablecoin yields could prompt bank runs as “totally absurd,” adding that such features “help with stickiness” and customer engagement during remarks at the World Economic Forum in Davos.
Anthony Scaramucci, founder of asset manager SkyBridge Capital, said that prohibiting yield-bearing stablecoins would disadvantage the U.S. dollar relative to China’s digital yuan, which he described as a yield-bearing central bank digital currency.
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