Banks Clash Over Stablecoin Rewards as Tether Grips Market

Regulators, banks, and industry groups clash over stablecoin rewards as Tether’s reserves sharpen the policy debate and push for regulatory clarity.

Rich by Coin

2026-02-15

Coinbase’s Chief Legal Officer Paul Grewal warned this week that blocking stablecoin rewards could unintentionally empower Tether. Banks have insisted that no stablecoin yield or reward should be allowed, arguing such yields threaten core depository activities. The dispute underscores the push for regulatory clarity through measures like the GENIUS Act and the Digital Asset Market Clarity Act.

The Digital Chamber replied with its own principles, signaling a willingness to protect rewards tied to liquidity and ecosystem participation. CEO Cody Carbone told CoinDesk the group aims to persuade policymakers and defends the Senate Banking Committee’s draft bill as a framework where certain rewards could be acceptable. They would preserve rewards for transactions and other activities while avoiding true interest payments on static holdings.

The White House has urged compromise by month’s end as meetings continue without a resolution. A high-profile social post noted Tether’s estimated $187 billion in reserves as a reminder of the policy leverage at play. The debate is accelerating calls for clearer stablecoin regulation and a measured approach to rewards in DeFi.