US lawmakers revisit stablecoin yields amid deposit flight concerns

US lawmakers are once again examining the issue of stablecoin yields as concerns grow about potential deposit flight from banks. During a Senate Banking Committee hearing, Senator Angela Alsobrooks expressed worries that stablecoin yields could function as bank-like products without the associated regulations and protections. The debate centers on whether platforms should be allowed to offer rewards for holding or transacting stablecoins, a practice currently restricted for issuers under the GENIUS Act but still permitted for third-party platforms like Coinbase. Banks argue that yields would drain deposits, while crypto firms contend there's no significant link to deposit flight. Regulators testified they haven't observed massive deposit flight, and some research suggests deposits even increased after the GENIUS Act passed. The OCC has proposed rules to implement the GENIUS Act, clarifying its jurisdiction over stablecoin issuers, and the White House is pushing for a resolution by the end of the month.

(Source：The Block)