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White House Proposal Targets Stablecoin Interest Payments Amid Regulatory Concerns
A recent discussion at the White House has introduced a proposal aimed at banning interest payments on idle stablecoin balances, with significant penalties for any violations. According to NS3.AI, the enforcement of this proposal would be overseen by the Securities and Exchange Commission (SEC), the Treasury Department, and the Commodity Futures Trading Commission (CFTC), highlighting an increase in regulatory scrutiny. The banking sector has expressed concerns over competition from cryptocurrency firms and is advocating for a study on deposit flight. However, banks are also considering compromises regarding regulations on stablecoin rewards. This development reflects ongoing tensions between traditional financial institutions and the emerging crypto market.