# Banks Related Articles

U.S. Banks Push Congress to Restrict Stablecoins and Crypto Data Access

U.S. banks, led by the American Bankers Association (ABA), are urging Congress to impose restrictions on stablecoins and financial data access. They advocate for a ban on yield-bearing stablecoins, warning that such products could draw trillillions of dollars from bank deposits, reducing lending capacity and creating financial stability risks. Additionally, banks seek changes to Section 1033 banking rules to impose stronger liability rules and potential fees on data sharing, which currently allows users to connect bank accounts to crypto platforms. Crypto and fintech groups argue these efforts are anti-competitive, designed to protect banks from innovation, and could effectively kill open banking by blocking connections or charging fees. This dispute has delayed a key crypto market structure bill in the U.S. Senate.

TheNewsCrypto01/22 11:23

David Sacks Says Banks and Crypto Will Merge Into One Digital Asset Industry

David Sacks, the White House crypto and AI Czar, stated at the World Economic Forum that banking and crypto industries are merging into a single digital asset sector under upcoming regulations. He emphasized that ongoing debates, such as whether stablecoin issuers can offer returns, require compromise between traditional banks and crypto firms. Sacks believes this integration will reshape the digital asset landscape, combining banking infrastructure with blockchain technology to promote financial inclusion. The U.S. regulatory landscape, including discussions around the CLARITY Act, reflects this shift toward blending financial and crypto markets.

TheNewsCrypto01/22 07:18

How Do Stablecoins Touch the Most Profitable Nerve of Banks?

U.S. banks are fiercely opposing interest-bearing stablecoins, not because they cause deposit outflows, but because they threaten the core profitability of large commercial banks. When funds flow into stablecoins like USDC, the money eventually returns to the banking system as reserves held in cash or short-term liquid assets. The real concern is the total amount of deposits, but a shift in deposit structure. Large U.S. banks rely heavily on "low-rate banking," where they hold massive amounts of non-interest or ultra-low-interest transaction deposits (used for payments, transfers, and settlements). These deposits are extremely cheap for banks, costing only 0-11 basis points in interest, while the Fed funds rate is 3.5%-3.75%. This spread, along with transaction fees, generates over $360 billion in annual revenue for banks. Interest-bearing stablecoins directly compete with these transaction deposits. If stablecoins offer yield, users may move funds from traditional bank transaction accounts into stablecoins for both utility and returns. Although the money remains in the banking system, stablecoin issuers would likely place most reserves in higher-yielding non-transaction accounts, forcing banks to pay market rates for these funds. This erodes banks' profit margins and reduces their fee income from payment services. The battle over the CLARITY法案 revolves around this profit redistribution. Banks want to ban all forms of yield on stablecoins to protect their lucrative low-cost deposit base and dominant position in the payment ecosystem.

比推01/19 14:58

Why Must Banks Ban Stablecoin Yields?

The article "Why Banks Are Determined to Ban Yield-Bearing Stablecoins?" explores the ongoing debate around the U.S. cryptocurrency market structure bill (CLARITY), particularly the fierce opposition from large banks against interest-bearing stablecoins. Banks argue that such stablecoins could cause deposit outflows, but the author refutes this, explaining that funds used to purchase stablecoins like USDC ultimately flow back into the banking system as reserves held by issuers like Circle. The real concern for banks is not the total volume of deposits but a shift in deposit structure. U.S. major banks (e.g., Bank of America, JPMorgan Chase) rely heavily on "low-interest banking," where transaction deposits (used for payments, transfers) pay near-zero interest, creating a significant spread between deposit rates and the Fed’s benchmark rate. This model generates massive profits—over $360 billion annually from interest differentials and transaction fees. Stablecoins directly compete with transaction deposits by offering similar utility (payments, settlements). If stablecoins can generate yield, users may shift funds from bank transaction accounts to stablecoins to earn higher returns. While the money remains in the banking system (as stablecoin reserves), it moves from low-cost transaction deposits to higher-yield instruments, squeezing bank profit margins and reducing fee income. Thus, banks oppose yield-bearing stablecoins to protect their lucrative low-cost deposit base and maintain control over profit distribution, making it a central issue in the CLARITY legislative battle.

marsbit01/19 09:43

Why Must Banks Ban Stablecoin Yields?

The article explores why U.S. banks are strongly opposing interest-bearing stablecoins, despite claims that such assets could cause bank deposit outflows. It argues that funds flowing into stablecoins like USDC do not leave the banking system—instead, they are held as reserves in highly liquid assets like cash or Treasury bills, which eventually return to banks. The real concern for large banks is not the total volume of deposits, but a shift in deposit structure. U.S. megabanks rely heavily on low-cost transactional deposits (used for payments and transfers), which pay near-zero interest. These deposits allow banks to profit from the spread between the Fed funds rate and what they pay depositors, as well as from transaction fees. Interest-bearing stablecoins threaten this model. They offer similar transactional utility but also provide yield, incentivizing users to move funds out of traditional bank transactional accounts. While the money may return to the banking system, it would likely be placed in higher-yielding deposit accounts, increasing banks’ funding costs. Additionally, stablecoins could disrupt banks’ fee income from payment services. The core issue is profit redistribution: stablecoins—especially those offering yield—could reduce banks’ low-cost funding advantage and erode their transaction revenue, explaining the fierce opposition to interest-bearing models in proposed legislation like the CLARITY Act.

Odaily星球日报01/19 09:26

Clash Over Stablecoin Legislation: Big Banks Vs. The Crypto Industry

The Senate Banking Committee's updated crypto market structure bill (CLARITY Act) has sparked a new battle over the GENIUS Act, which focuses on stablecoin regulation. Blockchain Association CEO Summer Mersinger claims the "Big Bank lobby" is pressuring Congress to revisit settled stablecoin reward legislation to suppress competition, not due to emerging risks. She argues that big banks, controlling assets equivalent to 60% of US GDP, offer low savings yields (0.39%) compared to the Federal Funds rate (3.50%-3.75%), and lobby against technologies providing better consumer returns by invoking "systemic risk" claims. Expert Omid Malekan criticized the notion that stablecoin holders shouldn't earn yields, advocating that interest from Treasury bills should benefit average Americans rather than bank executives. He cited JPMorgan's $25 billion net interest income as evidence of banks profiting from low saver returns, dismissing concerns that interest-paying stablecoins would harm lending. Both advocate for policies prioritizing consumer choice and fair returns.

bitcoinist01/14 11:01

The State Of US Stablecoin Legislation: Unresolved Issues And Challenges

In a recent analysis, Colin Wu highlights the complex challenges and unresolved issues stemming from the GENIUS Act, a US stablecoin law enacted under the Trump administration. While the act is seen as a win for digital asset adoption, it has intensified global demand for US dollars and Treasury securities, inadvertently benefiting Trump-linked crypto industry associates. This development complicates global dollar flow oversight and threatens the monetary sovereignty of other nations by enabling less observable wealth extraction through USD stablecoins. The act’s reserve requirements, including bank deposits and short-term Treasuries, risk instability if asset values decline. Moreover, stablecoin regulation may extend to all crypto assets, including Bitcoin and RWAs, as they rely heavily on stablecoins. Currently, unregulated firms profit from crypto trading due to banks' inability to participate, prompting regulators to accelerate oversight. Once crypto gains legal recognition, banks are expected to dominate, tokenizing deposits and integrating with traditional finance. However, this shift toward heavy bank regulation could undermine the stablecoin industry's foundations, making it unwise for other nations to emulate the US approach.

bitcoinist12/27 11:02

Strategy CEO Lifts The Curtain On Bitcoin Talks With Largest US Banks

Strategy CEO Phong Le reveals that major U.S. banks are actively engaging in Bitcoin-related discussions, driven by a need to compete with crypto-native firms like Coinbase and Fidelity. Conversations focus on foundational services such as custody and exchange, framed in traditional banking terms like "checking and savings accounts for Bitcoin." Beyond basics, banks are exploring a product roadmap including Bitcoin-backed loans, yield products, structured securities, and eventually digital money instruments offering stable high yields. Le notes that institutions like BNY Mellon, Wells Fargo, and JPMorgan are already moving toward issuing credit against Bitcoin or related derivatives, signaling a shift toward integrating Bitcoin as collateral within traditional financial systems.

bitcoinist12/24 17:24

Crypto Exec Warns Tokenization Is Moving Faster Than Expected

bitcoinist12/22 13:32

The Economist: The Real Threat of Cryptocurrency to Traditional Banks

The Economist article "The Real Threat Cryptocurrency Poses to Traditional Banks" examines the escalating tensions between the traditional banking sector and the crypto industry. Despite both benefiting from a more favorable regulatory environment, especially following the passage of the GENIUS Act which provided a legal framework for stablecoins, a significant power shift is occurring. Banks' most immediate concern is regulatory arbitrage in stablecoins. Although the GENIUS Act prohibits issuers from paying interest to prevent deposit outflows, companies like Circle circumvent this by sharing revenue with exchanges, which then pay "rewards" to users. Banks are demanding this loophole be closed. Furthermore, crypto firms are breaking into the core of the financial system. In a landmark move, U.S. regulators granted national bank trust charters to five digital asset firms, including Circle and Ripple, allowing them to provide custody services nationwide. The collective impact of these developments poses a profound threat. The core of the banks' dilemma is their waning political influence. Crypto has firmly entrenched itself within the right-wing, anti-establishment political sphere, amassing a massive war chest for lobbying. Banks are no longer the most powerful financial voice in the Republican party. In a ironic twist, they now sometimes find themselves allied with Democratic senators and left-leaning groups who share concerns over stablecoin risks, proving that political alliances in this battle are increasingly unpredictable.

深潮12/16 05:57