Washington – The Biden administration is stepping into a crucial debate over the future of stablecoins, convening meetings to address proposed regulations surrounding interest and rewards offered by cryptocurrency firms. At issue is how to balance the burgeoning digital asset market with potential risks to customary banking and financial stability, a concern amplified by estimates – including a recent analysis from Standard Chartered – suggesting a potential outflow of $500 billion from U.S. banks to stablecoins by 2028. The ongoing discussions center on clarifying existing law and navigating a loophole that allows exchanges to offer yields, despite restrictions placed on stablecoin issuers themselves.
The White House is hosting discussions with representatives from several industry groups to address how proposed legislation will treat interest rates and other rewards offered by cryptocurrency firms on stablecoins.
The Senate has been working for months on the Clarity Act, a bill designed to create a federal framework for regulating digital assets. The House of Representatives passed its own version of the legislation in July, but a vote in the Senate Banking Committee was postponed at the last minute, in part due to disagreements over the treatment of interest payments.
Cryptocurrency companies argue that these incentives are essential for attracting new customers and that banning them would put them at a competitive disadvantage. Banks, however, fear that increased competition could lead to a mass exodus of deposits, potentially jeopardizing financial stability.
Standard Chartered’s analysis on Tuesday suggested that stablecoins could draw as much as $500 billion away from U.S. banks by the end of 2028.
The debate stems from a stablecoin law passed last year, which prohibited stablecoin issuers from paying interest. However, banks contend that the law left a loophole, allowing third parties – such as cryptocurrency exchanges – to continue offering yields on the tokens, according to Reuters.
The ongoing discussions highlight the complex challenges regulators face in balancing innovation with financial stability in the rapidly evolving digital asset landscape. The outcome of the legislative process will likely have a significant impact on the future of stablecoins and the broader cryptocurrency industry.
CÃmlapkép: A washingtoni Fehér Ház 2025. december 5-én, amikor az idényben elõször havazik az amerikai fõvárosban. Forrása: MTI/EPA/Jim Lo Scalzo
