Banks, crypto firms tussle over interest on stablecoins
A battle is underway between banks and cryptocurrency firms over interest payments.
Banks can offer interest on deposits, but cryptocurrency firms are asking whether they can offer something similar to people who hold stablecoins, a type of cryptocurrency.
Stablecoins are a kind of cryptocurrency that doesn’t go up or down in value much and is used as a way to pay for things. The companies that issue stablecoins wanted to offer interest on them in the same way banks do on deposits, but Congress already said no.
Timothy Massad, a research fellow at Harvard’s Kennedy School and former chair of the Commodity Futures Trading Commission, said stablecoin issuers aren’t regulated as extensively as banks.
“We deliberately said they can’t…
