Overview
- An updated Senate Banking Committee draft would ban platforms from paying yield solely for holding payment stablecoins while preserving rewards tied to actions like liquidity provision, staking or governance.
- JPMorgan CFO Jeremy Barnum warned on the bank’s Q4 call that interest‑bearing stablecoins could create a parallel banking system without traditional prudential safeguards.
- Banking groups are pressing for tighter language that closes perceived loopholes on third‑party rewards, and a more restrictive amendment is expected to be offered at the committee markup.
- Crypto firms, including Coinbase, argue that overbroad limits would curb innovation and have signaled they could pull support for stablecoin programs if hold‑to‑earn bans go too far.
- With more than $312 billion in stablecoins outstanding as of Jan. 14, the committee’s Thursday markup could determine whether passive yields are curtailed and how activity‑based incentives are defined.