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Stablecoin Rewards Clash: White House Slams Bank CEOs
The White House advisor’s challenge to bank CEOs signals a split on stablecoin yield regulation, shaping the upcoming market structure bill markup. Stablecoin market near $160B may see flow shifts.
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The White House’s top crypto advisor directly challenged bank CEOs over stablecoin rewards. The comments arrived just before lawmakers were scheduled to mark up a crypto market structure bill. The advisor’s message signals a White House stance that stablecoin yield products do not need the same regulatory treatment as bank deposits.
The Reward Question and Banking’s Lobbying Effort
The conflict revolves around whether stablecoin issuers can legally offer yield or rewards to token holders. Banking industry representatives want any interest-bearing stablecoin designated as a deposit product. That classification would force non-bank issuers to secure banking charters and comply with capital, liquidity, and supervisory rules. The White House advisor’s pushback implies the administration may reject that framing and preserve a clear regulatory boundary between deposit-taking institutions and stablecoin operators.
For the banking sector, the reward debate is a route to constrain crypto-native stablecoin growth. Imposing deposit-like rules on yield-bearing stablecoins would burden Circle’s USDC and similar tokens with compliance obligations that traditional banks already meet. A bill embracing that approach would tilt the competitive field toward bank-issued stablecoins. The advisor’s comments suggest opposition to that outcome. This friction mirrors earlier episodes in which banking trade groups fought crypto companies’ access to bank charters. The Independent Community Bankers of America, for example, challenged Kraken’s Office of the Comptroller of the Currency (OCC) charter bid as a threat to deposit stability.