U.S. lawmakers reevaluate stablecoin yield issues, focusing on the risk of bank deposit outflows

SmartContractAuditor · 2026-02-26T22:45:13+00:00

U.S. lawmakers discuss stablecoin yield mechanisms, expressing concerns that they could trigger bank deposit outflows and regulatory gaps. Although the Stablecoin Act prohibits direct interest payments, it allows third parties to offer rewards. The banking industry worries that stablecoin yields will weaken the deposit base, potentially causing $1.3 trillion in deposit withdrawals. The crypto industry argues that restricting yields will stifle innovation. Senators call for an independent assessment, and the White House hopes to reach a resolution by the end of the month.

SmartContractAuditor

2026-02-26 22:45:13

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Odaily Planet Daily reports that U.S. lawmakers recently discussed the earnings mechanisms of stablecoins again. Some legislators are concerned that the yields offered by stablecoins could lead to bank deposit outflows and blur the line between crypto products and traditional bank deposits.

At a Senate Banking Committee hearing, Senator Angela Alsobrooks stated that while supporting financial innovation, the yield mechanisms of stablecoins could create products similar to bank deposits but lack appropriate regulation and protections, potentially causing future deposit losses.

The issue of stablecoin yields has long been a key topic in crypto market legislation negotiations. The Stablecoin Act passed in 2025, GENIUS, prohibits stablecoin issuers from paying interest directly to holders but does not ban third-party platforms like Coinbase from offering token rewards to users.

Bank industry experts believe that allowing stablecoins to offer yields would weaken the deposit base of traditional banks. The Independent Community Bankers of America previously estimated that if stablecoin yield mechanisms are fully opened, bank deposits could decrease by about $1.3 trillion, and community bank loan volumes could drop by approximately $850 billion.

The crypto industry counters that restricting stablecoin yields would stifle innovation. Some industry insiders say there is currently no evidence of a significant link between the widespread adoption of stablecoins and bank deposit outflows.

Senator Thom Tillis said that regulators will be asked to conduct an independent assessment of the potential risks of deposit outflows caused by stablecoins. Meanwhile, the White House has recently organized multiple meetings with banks and crypto companies, aiming to reach a resolution on stablecoin yield issues by the end of this month.

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