Reuters: U.S. Bank Lobbies to Block Payment of Interest with Stablecoin Due to Concerns About Deposit Outflows

BlockBeats News, August 25th, according to Reuters, Bank of America is pushing for modifications to new stablecoin regulation rules, fearing that these rules could trigger a multi-trillion-dollar fund outflow. This also highlights the increasingly fierce competition between Wall Street and the cryptocurrency industry.

Last week, bank lobbying groups including the American Bankers Association (ABA), the Bank Policy Institute (BPI), and the Consumer Bankers Association (CBA) warned lawmakers of "loopholes" in the regulation that could allow some cryptocurrency exchanges to indirectly pay interest to stablecoin holders.

The Genius Act is a law passed by the U.S. Congress in July aimed at regulating the $2.88 trillion global stablecoin market. The law prohibits issuers from paying "yield" or interest to customers. Under the new rules, banks can issue their own stablecoins but are not allowed to pay any interest.