Reuters: U.S. Banking Industry Lobbies to Block Interest Payments in Stablecoin Due to Concerns Over Deposit Outflows

BlockBeats News, August 25th, according to Reuters, the US banking industry is pushing for a modification to the new stablecoin regulatory rules, fearing that these rules could trigger a massive capital outflow of trillions of dollars, highlighting the increasingly fierce competition between Wall Street and the cryptocurrency industry.

Last week, bank lobbying groups, including the American Bankers Association (ABA), the Bank Policy Institute (BPI), and the Consumer Bankers Association (CBA), warned lawmakers of a "loophole" in the regulation that could potentially allow some cryptocurrency exchanges to indirectly pay interest to stablecoin holders.

The "Genius Act" is a law passed by the US Congress in July aimed at regulating the $288 billion global stablecoin market, which prohibits issuers from paying "yield" or interest to customers. Under the new rules, banks can issue their own stablecoins but are not allowed to pay any interest.