Reuters: U.S. banks lobby to block interest payments in stablecoins due to concerns about deposit outflows

According to Reuters on August 25, U.S. banks are pushing for changes to new stablecoin regulations, fearing they could trigger trillions of dollars in capital outflows, highlighting the growing 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 regulatory loophole that could allow some crypto trading platforms to indirectly pay interest to stablecoin holders. The Genius Act, a law passed by the U.S. Congress in July to regulate the $288 billion global stablecoin market, prohibits issuers from paying "yield" or interest to customers. Under the new rules, banks can issue their own stablecoins but are prohibited from paying any interest.