Crypto yields expose the exact amount banks are underpaying you, and why they want Congress to ban it

The debate surrounding the CLARITY Act highlights a conflict where stablecoin yields expose the significant gap between low retail deposit rates offered by banks and prevailing Treasury yields. For instance, FDIC data shows savings rates near 0.39% versus a 3.89% Treasury reference yield. Stablecoin rewards, often near 3.50% or higher, offer consumers an alternative for holding dollar balances, directly competing with bank deposits. Banks view this as a major strategic risk because it threatens their funding base, the lucrative customer relationship anchored by checking accounts (payroll, payments), and the cross-selling opportunities they rely on. The industry is pushing for legislation, like the CLARITY Act, to draw a line between permissible 'rewards' and prohibited 'yield' on stablecoins, aiming to curb 'hold-to-earn' behavior that functions like deposit interest but operates outside banking regulation. Banks fear that if stablecoin yields remain near cash benchmarks, they will be forced to raise their own deposit rates or rely more heavily on more expensive wholesale funding markets.

(Source：CryptoSlate)