Key Highlights
- 11, 2025 at 3:45 pm UTC Share Cover art/illustration via CryptoSlate.
- Image includes combined content which may include AI-generated content.
- The US Congress is closer than ever to defining federal rules for digital assets, yet the question of whether stablecoins can provide yield has slowed the process more than agency turf battles or token classification. Notably, the House has already advanced the Digital Asset Market Clarity Act, outlining a path for certain tokens to move from securities regulation to CFTC oversight. At the same time, the US Senate is shaping a parallel package that divides responsibilities between the Agriculture and Banking Committees. However, despite substantial areas of agreement, negotiators say the issue of stablecoin yield remains the sticking point. This debate concerns whether payment stablecoins should be able to pass through some portion of short-term Treasury returns to users, either as explicit interest or as promotional rewards offered by affiliated firms. Democratic lawmakers argue that yield-bearing structures could accelerate deposit outflows from community banks and raise funding costs.
- At the same time, Republicans contend that limiting yield would protect incumbent institutions at the expense of consumers. So, what began as a technical rulemaking question has become a broader discussion about the composition of the US deposit base and the potential for digital dollars to compete with traditional bank accounts. The $6.6 trillion outflow scenarioThe conversation shifted in mid-August after the Bank Policy Institute (BPI) highlighted what it described as a gap in the GENIUS Act, the stablecoin law enacted earlier this year. The statute prohibits issuers from paying interest but does not explicitly prevent exchanges or marketing affiliates from offering rewards linked to the issuer’s reserve assets. According to BPI, this structure could allow stablecoin operators to deliver cash-equivalent returns without obtaining a banking charter. To highlight the concern, the group cited government and central bank scenario analyses that estimate as much as $6.6 trillion in deposits could migrate into stablecoins under permissive yield designs. Analysts familiar with the modeling stress that the figure reflects a stress case rather than a projection, and assumes high substitutability between traditional deposits and tokenized cash. Even so, the number has shaped the debate.
- Senate aides say it has become a reference point in discussions over whether rewards programs constitute shadow deposit-taking and whether Congress must adopt anti-evasion language that covers affiliates, partners, and synthetic structures. The concern is grounded in recent experience.
