China To Pay Interest On Digital Currency Holdings, Crypto Firms Want The Same For Stablecoins Angering Banks
We need banking services; we just don’t necessarily need banks.
The advent of digital assets and the potential for disintermediation pose both threats and opportunities for traditional banks. Stablecoins may upend traditional financial rails, and the GENIUS Act provided a federal path for firms to issue digital dollars.
Yet, the newly minted law bans issuers from paying interest or yield on stablecoins to holders, as stablecoins are defined as means of value transfer rather than investments.
While it may seem to make little sense, as stablecoin issuers hold funds in assets like US Treasuries, generating returns that could be shared with stablecoin holders, banks are terrified by this possibility. Hence, the language in the…
