The U.S. banking industry is stepping up its influence in the ongoing debate over stablecoin regulation, as lawmakers struggle to advance comprehensive crypto market structure legislation. The American Bankers Association has outlined new policy priorities urging Congress to prohibit yield on payment stablecoins and revisit how open banking rules are implemented. Bank representatives argue that these measures are necessary to protect consumers and preserve competitive balance within the financial system. As digital dollars gain traction, banks see yield bearing stablecoins as a potential threat to traditional deposit models, particularly if consumers shift funds away from regulated institutions. The policy push comes at a sensitive moment in Washington, where efforts to align crypto markets with existing financial regulations remain fragmented and politically delicate.
Critics from the crypto and fintech sectors contend that the banking lobby’s proposals would significantly reshape the competitive landscape. They argue that restricting yield on stablecoins would limit innovation and reduce consumer choice, while changes to open banking rules could constrain how wallets and apps access financial data. These concerns have intensified as negotiations around the Senate’s crypto market structure bill have stalled, partly due to disagreements over stablecoin yield. The tension escalated after Coinbase withdrew its support from the bill, citing unresolved policy issues. For fintech firms, open banking provisions are seen as essential infrastructure that enables interoperability and user control, whereas tighter bank driven standards could introduce friction through fees or restricted access.
From the banking perspective, the stakes are systemic. Executives have warned that yield bearing stablecoins could function as substitutes for bank deposits, potentially draining liquidity from the traditional banking system. Leaders such as Bank of America have pointed to scenarios where large scale deposit outflows could reduce lending capacity and amplify financial risk. By addressing stablecoin yield and data sharing, banks are signaling a broader strategy to keep digital finance within established regulatory boundaries. As lawmakers continue negotiations, the banking lobby’s position underscores a central fault line in U.S. crypto policy. The question is whether digital dollars and financial data flows will evolve under open market principles or remain anchored to bank defined rules.
