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Stablecoins

Fee flow in Curve pools used in Yield Basis (CRV Governance Forum)
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MoneyGram Makes Stablecoins Front and Center of Its Next-Generation App

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MoneyGram, the ubiquitous send and receive cash network for retail customers, has made U.S. dollar-pegged stablecoins and blockchain settlement rails the digital backbone of its revamped mobile app, the company said on Wednesday.

Customers in the Latin American country of Colombia, where MoneyGram has an extensive retail network of over 6,000 locations, will be the first to use the new app to receive and store stablecoin payments, with plans to expand to additional markets in the near future.

Colombia is the ideal launch market, says MoneyGram CEO Anthony Soohoo. It’s a major inbound remittance corridor where families receive more than 22 times the money they send abroad, and where the Colombian peso has lost over 40% of its value over the past four years.

When it comes to the advancement of stablecoins, Soohoo compares this to other killer apps such as the humble spreadsheet, which drove adoption in the early PC era, or what the browser did for the Internet, or GPS and mobile phones.

“Stablecoins really are the killer app for crypto and I think we’re just at the dawn of all the possibilities,” Soohoo said in an interview. “Our customers are able to hold and store a currency that is stable and allows for real time settlement. And with the GENIUS Act passed in the US, we now have a framework in terms of how it’s going to be regulated and how we can work with it.”

Under the hood, the new MoneyGram app is powered by Circle’s USDC stablecoin and Stellar, the fast and cheap blockchain, as well as Crossmint, a wallet infrastructure and stablecoin payments platform.

Stepping back, MoneyGram has close to half a million locations where customers can pick up cash or send money, Soohoo said. As a remittance provider, it services over 20,000 corridors around the world. MoneyGram also happens to be the largest cash on and off ramp for crypto, Soohoo added.

“When you talk about global payments there are a lot of companies that may have a presence and a strong brand in one market but when you leave the U.S., or the U.K., for example, no one knows about them,” Soohoo said. “We’ve been around for many years now and our brand is truly global.”



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Most Companies Will Implement Stablecoins by 2026, $BEST Nears $16M
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Most Companies Will Implement Stablecoins by 2026, $BEST Nears $16M

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Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Per an EY-Parthenon survey, 54% of business leaders who have yet to touch stablecoins plan to do so by 2026.

Why the change of heart? Lower transaction costs and faster cross-border payments are the main reasons organizations are turning to stablecoins.

Since crypto wallets play a key role in enabling stablecoin transactions, choosing the right one matters. One option we like is Best Wallet, thanks to its ease of use and security.

Its native token, $BEST, also deserves a shout-out. It’s close to raising nearly $16M on presale, as it supports the wallet’s developments and grants holders low gas fees.

Only 13% of Firms Use Stablecoins, But 41% Report Big Savings

The report found that, right now, only around 13% of financial institutions and  international corporations use stablecoins. One of the main reasons for them not doing so boils down to regulatory uncertainty.

Source: EY-Parthenon

Yet, this percentage is on the rise following the passage of the GENIUS Act on July 18. It gives institutions greater regulatory clarity and, thus, confidence to move forward with adopting these digital assets.

And it’s no wonder stablecoins are attracting attention. Among current users, 41% said they’ve saved over 10% in costs compared to traditional payment methods.

The top use case for stablecoins is cross-border supplier payments, which account for 62% of implementations.

The reason is that they’re 1:1 backed by reserve assets (often the US dollar) for stability. Yet, they have faster settlement times compared to traditional international transfers.

Out of the stablecoins available, US-dollar-pegged ones are the go-to choice. $USDC is the clear frontrunner with 77%, followed by $USDT at 59%.

If these stablecoins are top of your radar, Best Wallet is a great way to manage, buy, and sell them.

Store Top Stablecoins & Cryptos on Best Wallet

Available on Google Play and iOS, the Best Wallet app is a great way to manage, buy, sell, and swap various types of cryptos while out and about.

The mobile app already supports over 1K+ assets across top chains like Ethereum, BNB Chain, and Polygon. This includes top stablecoins like $USDC and $USDT, plus leading cryptos like $BTC, $ETH, and $BNB.

It takes pride in making crypto activities simple. Check out its built-in launchpad, for instance. It gives you access to the best crypto presales. And that’s not to mention its swap engine, which scans 330+ DEXs and 30 bridges to find you the best rates.

Source: Best Wallet

And all is achieved with security intact. Because Best Wallet’s non-custodial, it ensures that you, and only you, have access to your private keys.

Also helping prevent unauthorized access are extra layers of protection like 2FA, biometrics, and local encryption.

Even if you lose account access, you can rest easy knowing that you can restore your assets through encrypted cloud backups.

The app also has lots to look forward to in the pipeline, including an NFT gallery, intel market analytics, and a rewards hub.

$BEST will make this possible, as a quarter of its total token supply is set aside for product development.

Source: Best Wallet Token

Holding $BEST also grants governance rights, reduces gas fees, and offers staking rewards at an 83% APY.

So far, $BEST has raised over $15.9M on presale, backed by three major investors ($70.2K, $91.1K, and $59K).

You can buy $BBEST for as little as $0.025655. Following the upcoming app developments, the cost could increase to $0.072 this year, making now a great time to join before it possibly spikes by over 180%.

Want to learn more? Check out our Best Wallet guide.

Authored by Leah Waters, Bitcoinist – https://bitcoinist.com/stablecoin-adoption-rises-best-wallet-nears-16m

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.



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Coinbase Stablecoins Don’t Drain Bank Deposits, Calls It A ‘Myth’
Crypto Trends

Stablecoins Don’t Drain Bank Deposits, Calls It a ‘Myth’

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Leading U.S. cryptocurrency exchange Coinbase has refuted claims that stablecoins threaten the US banking system by causing “deposit erosion.” It called this idea a myth.

In a blog post on September 16, the exchange dismissed concerns about stablecoins pulling funds from bank deposits as unfounded. Coinbase also cited that recent analysis highlighted that there is no significant connection between stablecoin use and deposit outflows at community banks.

Further, the exchange argued that stablecoins, which are dollar-pegged cryptocurrencies, function primarily as payment tools rather than savings accounts. “Stablecoins don’t threaten lending—they offer a competitive alternative to banks’ $187 billion annual swipe-fee windfall,” it stated, emphasizing that users choosing stablecoins for international payments are not reallocating savings but opting for faster, cheaper transactions.

The exchange also challenged a U.S. Treasury Borrowing Advisory Committee report projecting $6 trillion in potential deposit flight against a $2 trillion stablecoin market by 2028, calling the figures inconsistent. Coinbase’s accompanying paper noted that most stablecoin activity, over $1 trillion of $2 trillion in 2024 transactions, occurs outside the U.S., particularly in Asia, Latin America, and Africa, where financial infrastructure is weaker. 

Coinbase: Stablecoins boost USD, coexist with banks

Coinbase argued that this international use strengthens the U.S. dollar’s global dominance rather than undermining domestic banks. It further highlighted positive correlations between bank stock performance and crypto firms like itself and Circle after the passage of the GENIUS Act, suggesting banks and stablecoins can coexist. 

The exchange’s stance aligns with comments from Bitwise’s Investment Chief Matt Hougan, who last week criticized U.S. banks in an X post for offering low deposit yields while resisting stablecoin competition instead of improving services. The debate follows August 2025 calls from U.S. banking groups, led by the Bank Policy Institute, urging Congress to address a perceived loophole in the GENIUS Act that could allow stablecoin issuers to indirectly offer yields through crypto exchanges. 

Also Read: Hong Kong To Simplify Crypto Rules To Support Stablecoin Banking



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Are Stablecoins Really a Risk to Bank Deposits? Coinbase Policy Chief Says ‘No’

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Contrary to claims from the U.S. banking industry, stablecoins do not pose a risk to the financial system, according to the chief policy officer at crypto exchange Coinbase (COIN), Faryar Shirzad. Banks’ claims that they do are are myths crafted to defend their revenues, he wrote in a Tueday blog post.

“The central claim — that stablecoins will cause a mass outflow of bank deposits — simply doesn’t hold up,” Shirzad wrote. “Recent analysis shows no meaningful link between stablecoin adoption and deposit flight for community banks and there’s no reason to believe big banks would fare any worse.”

Larger lenders still hold trillions of dollars at the Federal Reserve and if deposits were really at risk, he argued, they would be competing harder for customer funds by offering higher interest rates rather than parking cash at the central bank

According to Shirzad, the real reason for banks’ opposition is the payments business. Stablecoins, digital tokens whose value is pegged to a real-life asset such as the dollar, offer faster and cheaper ways to move money, threatening an estimated $187 billion in annual swipe-fee revenue for traditional card networks and banks.

He compared the current pushback to earlier battles against ATMs and online banking, when incumbents warned of systemic dangers but, he said, were ultimately trying to protect entrenched profits.

Shirzad also dismissed reports predicting trillions in potential outflows from deposits into stablecoins, whose total market cap is around $290 billion, according to data from CoinGecko. He stressed that stablecoins are primarily used as payment tools — for trading digital assets or sending funds abroad — not as long-term savings products.

Someone purchasing stablecoins to settle with an overseas supplier, he argued, is opting for a more efficient transaction method the going through their bank, not pulling money from a savings account.

He urged banks to embrace the technology instead of resisting it, saying stablecoin rails could cut settlement times, lower correspondent banking costs and provide round-the-clock payments. Those institutions willing to adapt, he wrote, stand to benefit from the shift.

The U.K., too, faces concerns about the effect of stablecoins on the financial industry.

The Financial Times reported Monday that the Bank of England is considering setting limits on how many “systemic” stablecoins people and companies can hold — setting thresholds as low as 10,000 pounds ($13,600) for individuals and about 10 million pounds for businesses.

Officials define systemic stablecoins as those already widely used for U.K. payments or expected to become so, and say the caps are needed to prevent sudden deposit outflows that could weaken lending and financial stability.



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Crypto Exec Says Expect Tickerless US dollar Stablecoins in the Future
Crypto Trends

Crypto Exec Says Expect Tickerless US dollar Stablecoins in the Future

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Dollar-pegged stablecoins will eventually lose their price tickers, as exchanges abstract away the differently denominated stable tokens on the backend, presenting only a “USD” option to the user, according to Mert Mumtaz, CEO of remote procedure call (RPC) node provider Helius. 

The bidding war for the Hyperliquid USD stablecoin (USDH), and proposals from several firms promising to give 100% of the yield back to Hyperliquid, revealed that the stablecoin sector has become “commoditized,” Mumtaz said. 

Mumtaz added that he expects many companies to issue their own stablecoins and many existing stablecoin issuers to start their own payment chains in the future, which may create liquidity fragmentation, keeping capital trapped within those ecosystems. 

The number of US dollar stablecoin issuers continues to grow. Source: RWA.XYZ

He said that the most optimal solution to get ahead of this liquidity problem is for exchanges to simply accept all stablecoins and convert them to the desired denomination on the backend without the user seeing what is going on. Mumtaz wrote:

“The eventual endgame is that you don’t see the ticker at all. The apps will just display ‘USD’ instead of USDC, USDT, or USDX, and they will swap everything in the backend via a standardized interface.”

Stablecoins are likely to emerge as the de facto standard for fiat currencies in the digital age as the global financial system moves onchain and adopts internet-native systems, further eroding the need to denominate stablecoins from different issuers for end users. 

Related: Inside the Hyperliquid stablecoin race: The companies vying for USDH

Artificial intelligence to increase stablecoin abstraction

Reeve Collins, co-founder of stablecoin firm Tether and blockchain neo-bank WeFi, also told Cointelegraph that he expects the number of stablecoins to proliferate in the coming years, which will be abstracted through AI agents managing portfolios on behalf of users.

Collins said the next generation of stablecoin products, which includes yield-bearing tokens, will be automatically managed through agentic AI, removing “all of the complexity” of dealing with a multitude of different tokens, lowering technical hurdles for the end user.

“The only thing that will drive which token to use is which one makes you the most money, which one is the easiest to use,” Collins added. 

Magazine: Crypto wanted to overthrow banks, now it’s becoming them in stablecoin fight



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Stablecoins Must Offer Yield to Compete: Former Standard Chartered Tokenization Head

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In brief

  • Multiliquid CEO Will Beeson has argued yield is important for stablecoins to scale in a competitive market.
  • The GENIUS Act banned issuers from paying interest but leaves openings for third-party arrangements.
  • Banks have warned loopholes could drive trillions in deposits out of the U.S. banking system.

The clash between Wall Street and the crypto sector over yield-bearing stablecoins is intensifying in Washington.

The stablecoin industry needs more options for offering yield to users, according to Will Beeson, founder and CEO of RWA liquidity layer Multiliquid and Uniform Labs, and former head of tokenized asset infrastructure at Standard Chartered.

“In a competitive market with others issuing their own stablecoins, you end up in a situation where you’re looking for ways to incentivize users to use your stablecoin,” Beeson told Decrypt. “The ability to pay yield would be an important way to do that.”

The GENIUS Act and stablecoin yields

Beeson’s comments come as the federal government implements the GENIUS Act, legislation signed by President Donald Trump in July to create the first formal U.S. framework for stablecoin issuance and trading. While the law bars issuers from paying yield, it stops short of banning third parties such as exchanges from offering interest or rewards on stablecoin holdings.

For instance, crypto exchange Coinbase pays interest on USDC balances held on its platform in Circle’s stablecoin USDC, effectively offering yield through a third party.

“What is prohibited under GENIUS is the ability for stablecoin issuers to pay interest or yield directly to holders,” Beeson explained. “The bill does not prevent intermediaries or third parties from paying incentives.”

That gap has become the flashpoint of a lobbying battle. “My understanding is that it has to do with requests by the banking lobby as the regulation was structured, and fears about yield-bearing stablecoins effectively providing a much more attractive savings tool than lower-yielding bank deposits,” Beeson said.



Banks have pressed Congress to close the door completely. In an August 12 letter, the Bank Policy Institute and four other major trade groups warned lawmakers that leaving the so-called loophole intact could drain as much as $6.6 trillion from the U.S. deposit system.

“Without an explicit prohibition applying to exchanges, which act as a distribution channel for stablecoin issuers or business affiliates, the requirements in the GENIUS Act can be easily evaded and undermined by allowing payment of interest indirectly to holders of stablecoins,” it said.

“The result will be greater deposit flight risk, especially in times of stress, that will undermine credit creation throughout the economy,” the BPI’s letter argued, adding that the resulting reduction in credit supply would lead to “higher interest rates, fewer loans, and increased costs for Main Street businesses and households.”

Crypto groups fight back

Crypto groups have fought back. On August 20, the Blockchain Association and the Crypto Council for Innovation sent their own letter urging regulators to resist bank pressure and disputing the $6.6 trillion claim. “This claim does not hold up to scrutiny,” the letter read.

Cutting off yield, they warned, would freeze innovation and leave U.S. firms at a disadvantage internationally. “Allowing responsible, robustly regulated platforms to share benefits with customers is not a loophole – it is a feature that promotes financial inclusion, fosters innovation, and ensures American leadership in the next generation of payments,” they said.

Still, Beeson said expectations for any near-term change to the law should be tempered. “I think realistically it’s less than a fifty percent chance,” he said, pointing to Washington’s legislative gridlock.

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Crypto Trends

Stripe CEO Explains Why Stablecoins Are Winning Over Global Businesses

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Stripe CEO Patrick Collison said stablecoins are gaining adoption because they offer businesses faster, cheaper and more reliable payments than traditional systems.

His remarks came in a Hacker News thread on Sept. 5, 2025, one day after Stripe and Paradigm launched Tempo, a blockchain designed specifically for stablecoin payments.

In his first comment on the Tempo announcement thread, Collison wrote that Stripe had been “disappointed with crypto’s payments utility for much of the past decade.” He said the company’s view shifted as more businesses began using stablecoins for routine financial activity.

Collison pointed to Bridge, the stablecoin infrastructure provider Stripe acquired in October 2024. He said SpaceX uses it to manage money flows in hard-to-reach markets, Latin American fintech DolarApp relies on it for banking services, and an Argentinian bike importer uses Stripe’s dashboard to pay suppliers.

“These businesses are not using crypto because it’s crypto or for speculative benefit,” Collison wrote. “They’re performing real-world financial activity, and they’ve found that crypto (via stablecoins) is easier, faster, better than the status quo.”

When asked whether people will eventually “pay with Tempo,” Collison said the blockchain is intended to function behind the scenes. He compared it to financial messaging systems like SWIFT or ACH, noting that consumers may not interact with Tempo directly but would benefit from its efficiency. He called “decentralized, internet-scale SWIFT” an imperfect but useful analogy.

In the answer to another question (about why businesses find crypto payments appealing), Collison outlined five reasons companies prefer stablecoins: near-instant settlement that reduces trapped liquidity, lower costs than card payments, greater reliability in cross-border transfers, fewer currency conversions and direct on-chain access to U.S. dollars.

He also rejected the idea that adoption is mainly regulatory arbitrage. Collison said stablecoins are now explicitly regulated in the United States under the GENIUS Act and in Europe under MiCA, and argued their appeal lies in solving the frictions of high-volume money movement.

In the Thursday announcement, Tempo was described as a “payments-first” blockchain built from the ground up for stablecoins, combining Stripe’s global payments experience with Paradigm’s crypto research. The companies said they launched the network to provide infrastructure tailored to real-world payment needs as stablecoins move into mainstream use.

Tempo’s design emphasizes predictable low fees, optional privacy and the ability to pay both transactions and gas costs in any stablecoin. It includes a dedicated payments lane with features such as memos and access lists, and is EVM-compatible, running on the Reth client. Stripe and Paradigm said the blockchain is engineered to process more than 100,000 transactions per second with sub-second finality.

The network is aimed at supporting global payouts and payroll, remittances, tokenized deposits that can settle around the clock, embedded financial accounts, microtransactions and what the companies call “agentic payments.”

Stripe and Paradigm also stressed governance. They said Tempo will operate as a neutral platform for stablecoins, secured by an independent and diverse validator set, with a roadmap toward fully permissionless validation.

The project launched with a broad roster of design partners, including Visa, Standard Chartered, Deutsche Bank, Nubank, Revolut, Shopify, OpenAI, Anthropic, Coupang, DoorDash, Lead Bank and Mercury.



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Fireblocks Unveils Payments Network as SWIFT for Stablecoins

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Crypto custody heavyweight Fireblocks has unveiled its own payments network to help participants move stablecoins around.

The Fireblocks Network for Payments is designed to combine on- and off-ramps, liquidity providers, banks and stablecoin issuers with higher efficiency and lower risk than currently exists when providers use more fragmented and disperse systems.

The network’s participants already number more than 40 and include Circle (CRCL), developer of USDC, and stablecoin platform Bridge.

Fireblocks described the new network as a stablecoin equivalent to SWIFT, which enabled banks around the world to more easily send money across borders, in an announcement on Thursday.

The network combines for over $200 billion in stablecoin payments each month, Fireblocks said. The monthly total for all stablecoin payments reached $800 billion in June, according to research cited by Grayscale.

Stablecoins, crypto tokens which are pegged to the value of a traditional financial asset such as a fiat currency, have undergone a boom in 2025, climbing to a market cap of over $280 billion in August from around $200 billion at the start of the year.

The proliferation of the sector has seen its largest players develop their own payments platforms to supplement this growth further. Stripe acquired Bridge last year to serve as its stablecoin platform, while Circle unveiled its own payments network in April.

Both firms are also developing their own proprietary blockchains for stablecoins and tokenized assets.



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Binance Liquidity Flows Into Stablecoins As Bitcoin Exposure Cools
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Binance Bitcoin Liquidity Flows Into Stablecoins As BTC Exposure Cools

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Trusted Editorial content, reviewed by leading industry experts and seasoned editors. Ad Disclosure

Bitcoin is currently consolidating around the $110K level after days of selling pressure and heightened uncertainty. The bullish momentum that carried BTC to its recent all-time high of $124,500 has slowed, and the market is now in a corrective phase. Bulls are attempting to defend key support zones, but fading strength suggests that consolidation could persist in the near term.

Top analyst Darkfost has highlighted a critical development on Binance: the BTC/Stablecoin reserves ratio is approaching levels that historically flash rare buy signals. This ratio measures the balance between Bitcoin reserves and stablecoin reserves on the exchange, offering insight into investor positioning and liquidity dynamics.

According to Darkfost, the current setup is significant because this signal has only appeared twice since the last bear market. Notably, the previous instance was in March, when Bitcoin retraced to $78,000 before igniting a powerful rally that drove it to new highs around $123,000. The potential re-emergence of this signal suggests that, despite short-term weakness, underlying liquidity conditions may be setting the stage for another upward move.

Bitcoin Reserves And Stablecoin Dynamics Signal Unusual Setup

According to analyst Axel Adler, a significant development is unfolding on Binance as the BTC/Stablecoin ratio approaches the critical level of 1. This ratio essentially shows that the amount of Bitcoin reserves held on the exchange is nearing equivalence with the stablecoin reserves also present there. In practical terms, this means that liquidity on the platform is shifting, with stablecoin reserves increasing relative to BTC holdings.

Binance Bitcoin/Stablecoin Reserve Ratio | Source: Darkfost

This trend suggests that Binance investors are not currently overexposed to Bitcoin. Instead, they are holding more dry powder in the form of stablecoins, positioning themselves for potential opportunities. The data is further reinforced by a new milestone: ERC-20 stablecoin reserves on Binance have just reached an all-time high of $37.8 billion. Such a figure confirms that demand and liquidity continue to flow into the platform at a steady pace, even as Bitcoin undergoes its current correction.

The implications are twofold. On one hand, the growing stablecoin reserves could provide the necessary fuel for a sharp rebound if sentiment shifts. On the other, Adler emphasizes that this type of setup has historically been observed in bear market environments, where stablecoin accumulation signals caution rather than risk appetite.

This contradiction makes the current situation especially intriguing. With Bitcoin consolidating after its run to $124,500, the market is entering a decisive stage. Monitoring how these reserves evolve in the coming weeks will be critical, as they may ultimately determine whether BTC finds renewed bullish momentum—or drifts into a more prolonged correction.

BTC Momentum Weakens: Consolidation Around $110K

Bitcoin’s price action on the 12-hour chart shows consolidation around the $110,800 level following a period of heightened volatility. After reaching its all-time high near $124,000, BTC retraced sharply and is now struggling to regain upward momentum. The price is trading slightly above the 200-day moving average (red line), which is currently acting as a key support zone around $111,700.

BTC testing key resistance | Source: BTCUSDT chart on TradingView

The 50-day (blue line) and 100-day (green line) moving averages remain above current levels, suggesting that Bitcoin is still under bearish short-term pressure. Until BTC reclaims the $113,000–$115,000 range, any recovery is more likely to be corrective than the start of a renewed bullish trend.

Resistance near $112,500 has capped recent attempts at recovery, while immediate support sits between $108,000 and $109,000. A decisive breakdown below this range could push BTC toward the $105,000 region, where stronger structural demand is located. On the other hand, a successful reclaim of $115,000 would increase the odds of another attempt toward $120,000.

Featured image from Dall-E, chart from TradingView

Editorial Process for bitcoinist is centered on delivering thoroughly researched, accurate, and unbiased content. We uphold strict sourcing standards, and each page undergoes diligent review by our team of top technology experts and seasoned editors. This process ensures the integrity, relevance, and value of our content for our readers.



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The Loophole Turning Stablecoins Into a Trillion-Dollar Fight
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The Loophole Turning Stablecoins Into a Trillion-Dollar Fight

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Crypto advocates see things differently. They claim stablecoin rewards create healthy market pressure and could drive big banks to provide more competitive interest rates in an effort to keep customer deposits.

“To call this a trillion-dollar fight would be an understatement: This is highly fraught territory that banks have jealously guarded,” says former Republican Representative Patrick McHenry of North Carolina, who served as Chair of the House Financial Services Committee until January 2025.

A study commissioned by Coinbase predicts a maximum decrease in banks’ deposits of 6.1 percent. Looking at community banks specifically, the report does not find a statistically significant effect on deposits under what it sees as likelier market-growth projections for stablecoins. Meanwhile, Dante Disparte, chief strategy officer and head of global policy at Circle, the issuer of USDC, has written that “today’s generation of successful stablecoins have increased dollar deposits in the U.S. and global banking system,” adding that the prohibition on interest from stablecoin issuers represents “a measure that would protect the deposit base.”

The Compromise

In the four years it took to push stablecoin legislation over the finish line, most lawmakers in Congress agreed that stablecoin issuers should not pay interest. “The drafters understood that [stablecoins are] a different kind of instrument: digital cash, a digital dollar, not a security instrument that provides a return,” says Corey Then, deputy general counsel of global policy at Circle.

In March, Coinbase CEO Brian Armstrong weighed in. On X, he suggested customers should be allowed to earn interest on stablecoins. He likened the arrangement to “an ordinary savings account, without the onerous disclosure requirements and tax implications imposed by securities laws.”

The rest of the story—as told by Ron Hammond, who recently worked as a senior lobbyist on behalf of the Blockchain Association, a prominent crypto industry group—goes something like this: Eventually, the banking industry agreed to a deal, which included the sought-after prohibition on stablecoin issuers paying interest. But the provision still left some room for crypto exchanges to provide users with a monetary incentive for holding stablecoins. Hammond says some crypto companies had hoped interest would be explicitly allowed, but prominent crypto groups were willing to agree to a compromise.

“The world of crypto, at the very least, was successful in getting language that opens the door for them to provide some type of reward that either is yield or something that resembles yield,” says McHenry, the former Chair of the House Financial Services Committee, who now serves as the vice-chair of Ondo, a blockchain-focused financial markets company.

The fact that banking industry groups are now sounding the alarm about stablecoins frustrates some crypto industry experts. “Raising concerns about stablecoin rewards at this stage feels disingenuous and overlooks the extensive debate that shaped the GENIUS Act,” says Cody Carbone, CEO of the Digital Chamber, a crypto-focused advocacy and lobbying group. “Banking industry representatives were fully engaged throughout the process, alongside crypto stakeholders, and the final language, which permits stablecoin-related rewards offered by exchanges and affiliated platforms, was a direct product of those discussions.”

A Second Chance

The crypto industry might have been willing to compromise in part because it didn’t want to expend too much political capital on a bill it viewed as a test case for broader crypto regulation. “The concern for the crypto industry was, ‘If we start having hiccups with the stablecoin bill—the easy bill—the odds of us getting past it significantly go down, and then the odds of us getting to the market structure bill are near zero for these next two years,’” Hammond says.

The bill he is referring to is what’s known as the CLARITY Act, which attempts to create a regulatory framework for products and financial platforms operating on the blockchain, much like the laws already governing traditional financial entities like stock markets, banks, and institutional investors. The act has passed in the House; a Senate version of the bill is expected in September. Days after the GENIUS Act was signed, Senate drafters of the CLARITY Act published a request for information that asks whether legislation should limit or prohibit systems like stablecoin rewards.



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