Industry groups led by the Blockchain Association have pushed back against regulatory moves to limit stablecoin yield-sharing and third-party rewards. In a letter signed by more than 125 organizations, the association warned that such restrictions could curb innovation, stifle competition, and tilt the playing field toward incumbent financial institutions. The correspondence specifically challenges expansions within the GENIUS stablecoin framework that would bar third-party providers from offering rewards and yields to stablecoin holders.
Advocates argue that banning yield-sharing would erect unnecessary barriers for crypto platforms competing with banks and payment networks that routinely offer incentives. The association notes that such restrictions could undermine consumer access to rewards that help hedge against inflation and promote financial inclusion. They also contend that previous attempts to block yield-sharing are unjustified, arguing that digital assets can coexist with traditional finance to foster competition and innovation. Regulators are weighing an FDIC proposal that would allow banks to issue stablecoins through subsidiaries under regulatory oversight, including reserve requirements, a move aimed at legitimizing stablecoin issuance within the banking system.
The debate underscores broader tensions between crypto innovation and traditional financial oversight as regulators consider how to integrate digital assets into the banking system. The outcome could shape future policy on stablecoins and crypto incentives.
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