"The Battle Over Stablecoin Yields: How It Got Stuck in U.S. Crypto Regulatory Legislation" (Author: Oluwapelumi Adejumo)

The U.S. stablecoin "yield" controversy has caused the Senate's CLARITY Act to stall due to breakdown in negotiations; the banking industry is demanding a ban on stablecoin companies providing yield similar to bank deposit interest, arguing that even limited yield incentives could impact deposit bases, with Standard Chartered predicting potential withdrawal of approximately $500 billion in deposits from the U.S. banking system by the end of 2028; crypto enterprises believe that incentive measures tied to payments, wallet usage, or network activity help foster competition; the Congressional Research Service noted on March 6 that the GENIUS Act prohibits issuers from paying yields to users, but lacks complete clarity on the "three-party model"; the White House's proposal allowing yields in certain scenarios while prohibiting returns on idle funds did not gain banking support, and the Office of the Comptroller of the Currency proposed in draft rules to classify such arrangements as "disguised payment of prohibited yields"; industry sources indicate the legislative window for the bill is late April to early May, and if not passed, the crypto market will rely more on regulatory guidance, interim rules, and future political developments. Read the full article: