US Financial Sector in Emergency over Stablecoin Reward Clause..."Action Initiated as Deposit Monopoly Shakes"

▲ Stablecoin, Interest/ChatGPT Generated Image

Ahead of the Senate markup of the U.S. cryptocurrency market structure bill, the banking sector is moving to block stablecoin reward provisions, turning the discussion on U.S. digital asset regulation into a head-on collision over competition between bank deposits and cryptocurrency earnings.

The crypto-focused YouTube channel Altcoin Daily reported in a video uploaded on May 12 (local time) that the U.S. Senate Banking Committee is scheduled to conduct a markup and vote on the U.S. cryptocurrency market structure bill this Thursday. The host described the bill as the most significant market structure bill for the U.S. crypto industry, explaining that if passed, the U.S. digital asset market would enter a full-fledged regulatory framework for the first time.

The core issue of the video is the stablecoin reward provision. According to Altcoin Daily, the CEO of the American Bankers Association sent an urgent message to bank executives across the U.S., requesting them to contact senators. The banking sector argued that if crypto companies offer interest-like rewards on stablecoins for payments, bank deposits could shift to stablecoins, threatening economic growth and financial stability. The host refuted the banking sector's labeling of the provision as a "stablecoin loophole," stating that it is "not a loophole but legal language agreed upon by Congress."

Altcoin Daily interpreted the banking sector's actions as lobbying aimed at preventing deposit outflows and defending profitability. The host pointed out that traditional banks have historically paid low interest to depositors while using their deposits to generate profits. He argued that the GENIUS Stablecoin Regulation Act and the U.S. Cryptocurrency Market Structure Bill are creating opportunities for user rewards for private companies like Coinbase and Circle, thereby shaking the banking sector's monopolistic structure. He stated, "A fair competitive environment is needed where banks and crypto companies can leverage stablecoin legislation as an opportunity."

The video urged cryptocurrency holders to email their senators. The host explained that while this markup is not the final passage, it is a gateway for the bill to move forward in the overall legislative process. There was also a mention that the White House aims to pass the bill around July 4th. Altcoin Daily emphasized that bank lobbyists are trying to weaken the stablecoin reward provision at the last minute, and direct expression of opinion from cryptocurrency users is necessary.

Altcoin news was also covered. Ondo was introduced as having surpassed $1 billion in total deposits in the global market and secured over 70% market share in the tokenized stock market. The host stated that Ondo was the first among tokenized stock and ETF platforms to reach $1 billion in total deposits in less than 8 months, evaluating the on-chain movement of traditional financial assets as positive for the Solana (SOL), BNB Chain, and Ethereum (ETH) ecosystems. Bittensor saw its price rise by over 7% as the Grayscale Bittensor Trust opened to institutional investors, and it plans to strengthen subnet owner token locking and investor protection features through the Conviction upgrade.

As for macroeconomic variables, the confirmation process for Kevin Warsh as Federal Reserve Chair was presented. The host evaluated Warsh as a pro-Bitcoin candidate, explaining that he must go through entry into the Fed Board of Governors and a vote for Chair nomination. Warsh's nomination passed the Senate Banking Committee by a vote of 13 to 11, with a simple majority needed for final confirmation. Altcoin Daily reported that with the U.S. cryptocurrency market structure bill, stablecoin reward provisions, expansion of institutional altcoin products, and the Fed Chair confirmation variable all converging in the same week, discussions on the institutional integration of the cryptocurrency market are intensifying.

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