PART 3
As a result, the Community Bankers Council has urged Congress to include stronger provisions in upcoming crypto market structure legislation to close these gaps and prevent stablecoin issuers from offering yield indirectly.
The crypto industry, however, strongly disputes the banking sector’s claims. Circle CEO Jeremy Allaire has dismissed concerns that yield-bearing stablecoins could trigger bank runs or destabilize the financial system, calling such fears “totally absurd.” Speaking at the World Economic Forum in Davos, Allaire argued that stablecoin yields enhance customer engagement and retention rather than threatening financial stability.
Similarly, Anthony Scaramucci, founder of SkyBridge Capital, has warned that banning yield-bearing stablecoins could place the U.S. dollar at a strategic disadvantage. He argued that such restrictions would weaken the dollar’s competitiveness relative to China’s digital yuan, which is a yield-bearing central bank digital currency.
As Congress accelerates efforts to finalize crypto market structure legislation ahead of the midterm elections, the debate over stablecoin yields has become a central fault line between traditional financial institutions and the digital asset industry. The outcome is likely to shape the future role of stablecoins in the U.S. financial system and determine whether they remain tightly constrained payment instruments or evolve into broader deposit-like financial produ
