Crypto Leaders Push Congress for Stablecoin Interest Sharing
2min read Crypto industry leaders are intensifying their efforts to persuade Congress to permit stablecoin issuers to share interest with users. This push comes as the industry seeks to align the rights of stablecoin issuers with those of traditional banks, ensuring that users can benefit from the interest generated by their holdings.
Stablecoins maintain their value by being backed 1:1 by real-world assets like the US dollar. Issuers typically invest these dollar reserves in low-risk assets such as US Treasuries to generate yield. The interest earned from these investments could be used to incentivize holders, similar to how banks pay interest to depositors. However, unlike interest-bearing checking and savings accounts, stablecoins do not currently benefit from the same exemptions under securities laws that allow issuers to pay interest to users.
Coinbase CEO Brian Armstrong has been a vocal advocate for this change, stating that stablecoins should be able to pay interest just like an ordinary savings account, without the onerous disclosure requirements and tax implications imposed by securities laws. This sentiment is echoed by other industry leaders who are lobbying for stablecoin regulations to include a provision that enables issuers to share interest with users.
Recent legislative developments have shown some support for stablecoin regulations. Last month, the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act secured support from the Senate Banking Committee with a bipartisan 18-6 vote. Last week, the House Financial Services Committee passed the Stablecoin Transparency and Accountability for a Better Ledger Economy (STABLE) Act of 2025 with a 32-17 vote. However, the STABLE Act of 2025 prohibits stablecoin issuers from paying yield to holders, while the GENIUS Act has vague language on the matter.
Ask Aime: How will stablecoin interest-sharing regulations affect the crypto market?
A source with knowledge on the matter indicates that lawmakers are open-minded about the possibility of including a provision that allows issuers to pay interest on stablecoin holdings. This openness reflects a broader trend in the digital asset industry, where leaders are seeking to engage with policymakers to shape regulations that support innovation while protecting consumers.
However, traditional financial firms are opposing this move. The American Bankers Association has expressed concerns that allowing stablecoin issuers to pay interest could drive consumers to move money out of their bank accounts and into stablecoin wallets. This, they argue, poses a significant risk to the fundamental role banks play in credit intermediation.
The push for yield-sharing between stablecoin issuers and holders is part of a broader effort to create a more equitable and transparent financial system. By allowing issuers to share interest with users, the industry aims to provide a more attractive option for those looking to hold stablecoins, potentially increasing adoption and usage. This proactive approach is crucial as the industry continues to evolve and gain mainstream acceptance.
The lobbying efforts also reflect a broader trend in the digital asset industry, where leaders are seeking to engage with policymakers to shape regulations that support innovation while protecting consumers. This proactive approach is crucial as the industry continues to evolve and gain mainstream acceptance. The push for yield-sharing is also seen as a way to address concerns about the stability and security of stablecoins. By ensuring that users can benefit from the interest generated by their holdings, the industry hopes to build trust and confidence in these digital assets.
