Banks are lobbying to kill crypto rewards to protect a hidden $1,400 “tax” on every household
Banks are lobbying Congress to ban stablecoin rewards, which they see as a loophole, to protect over $360 billion in annual revenue from Fed reserves and card fees.Summary
US banks are aggressively lobbying Congress to close what they deem a loophole in the GENIUS Act that allows stablecoin issuers to offer competitive yields through affiliate programs, effectively acting as loyalty incentives rather than prohibited interest payments. This lobbying effort aims to protect massive revenue streams: $176 billion annually from interest on reserves held at the Federal Reserve and another $187 billion from card swipe fees, totaling over $360 billion. Stablecoins threaten both revenue sources by offering users similar Treasury yields passively and by potentially bypassing costly card network infrastructure for payments. Banking groups argue that allowing these rewards constitutes a prudential risk to deposits, but research commissioned by Coinbase suggests minimal impact on community bank deposits. The core of the dispute revolves around whether the GENIUS Act's ban on paying interest should be interpreted narrowly (applying only to issuers) or broadly (extending to all affiliated entities), which would determine if stablecoins can compete directly with traditional bank accounts and rewards programs.
(Source：CryptoSlate)