The American Bankers Association (ABA) has placed cracking down on stablecoin yields as its top regulatory priority for 2026, setting the stage for a pivotal clash with the crypto industry as Congress moves toward finalizing comprehensive digital asset legislation. The banking lobby argues that yield-bearing stablecoins threaten to pull trillions in deposits away from traditional banks, potentially weakening their lending capacity and destabilizing the financial system.
In its outlined priorities, the ABA explicitly aims to "stop payment stablecoins from becoming deposit substitutes" by prohibiting the payment of interest, yield, or rewards. This push builds on existing legislation, such as the GENIUS Act passed last year, which already barred issuers from offering yield directly. However, bankers warn of a potential loophole that could allow yields to be offered through third parties, prompting calls for stricter provisions in the pending market structure bill.
The debate has drawn high-profile figures from both sides. Bank of America CEO Brian Moynihan warned that up to $6 trillion could migrate from banks to interest-paying stablecoins. In contrast, Circle CEO Jeremy Allaire dismissed concerns about triggering bank runs as "totally absurd," arguing that yields help with customer adoption and retention. SkyBridge Capital founder Anthony Scaramucci added that prohibiting such yields could put the U.S. dollar at a competitive disadvantage against yield-bearing digital currencies like China's digital yuan.
This conflict is intertwined with the broader open banking debate under Section 1033, which governs consumer data access. Banks are seeking revisions to define liability and clarify standards, while crypto firms argue these could create technical or fee-based hurdles that stifle innovation, particularly for stablecoin wallet onboarding and payment services.
As lawmakers work to finalize the crypto market structure bill, which seeks to establish clear federal agency authority over digital transactions, the dispute over stablecoin yields has contributed to delays in committee sessions. The outcome is expected to significantly influence the design of the U.S. digital payments landscape, balancing financial stability concerns with the growth of digital finance.
