The American Bankers Association plans to lobby to block interest-paying stablecoins.
TL;DR
The American Bankers Association aims to block interest-paying stablecoins by 2026, fearing they could drain bank deposits and weaken lending. Circle's CEO calls this concern absurd, arguing yields boost user loyalty and stablecoins are key for future AI payments.
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According to Odaily Odaily, the American Bankers Association has listed "preventing stablecoins from generating returns" as its top lobbying goal for 2026. The association believes that interest-bearing stablecoins will become a substitute for bank deposits, potentially leading to trillions of dollars flowing out of the traditional banking system, thereby weakening banks' lending capacity and jeopardizing their core role in the financial system.
In response, Circle CEO Jeremy Allaire refuted concerns at the Davos Forum, calling the idea that stablecoin yields would affect bank deposits "completely absurd," and pointing out that yields can enhance user stickiness and that stablecoins will become an essential payment system for AI agents to conduct large-scale transactions in the future. Opponents argue that this move aims to protect bank interests, restricts fintech innovation, and puts the US dollar at a disadvantage in competition with China's digital yuan. (Cryptopolitan)