The American Bankers Association wants Congress to eliminate stablecoin yields before the midterms.
The ABA released its 2026 policy priorities on Tuesday, placing stablecoin oversight at the top of the list. The group is pushing lawmakers to “stop payment stablecoins from becoming deposit substitutes” by banning interest, yield, or rewards on these tokens.
Congress is already working on crypto market structure legislation ahead of the November 2026 elections. Banks see this as the moment to act.
Bank of America CEO Brian Moynihan raised the alarm earlier this month. He argued that up to $6 trillion could leave traditional banks if stablecoin yields remain legal.
The ABA says community banks would take the hardest hit. Without deposits, these banks lose the ability to fund mortgages and small business loans. The lobby frames this as a financial stability issue, not an attack on innovation.
On January 14, more than 3,200 bankers signed a letter to the Senate demanding action. They want yield bans extended beyond stablecoin issuers to include crypto exchanges and affiliated platforms. The reason: a loophole in the GENIUS Act still allows yield payments through third parties.
Crypto executives see things differently.
Circle CEO Jeremy Allaire pushed back on the bank run narrative at Davos. “They help with stickiness, they help with customer traction,” he said, defending stablecoin yields as a tool for adoption.
SkyBridge Capital founder Anthony Scaramucci warned that banning yields could backfire. He pointed out that China’s digital yuan already offers yield, putting the US dollar at a competitive disadvantage if American stablecoins cannot do the same.
The stablecoin yield fight has already caused problems on Capitol Hill. Last week, the Senate Banking Committee postponed a key markup after Coinbase withdrew its support over the issue.
As lawmakers push toward a final vote, the outcome will determine whether digital dollars can compete with traditional bank deposits or remain locked inside bank-friendly rules.
Stablecoin yields are interest or rewards paid on digital tokens. Banks fear they could draw deposits away, threatening traditional lending.
Crypto firms say yields encourage adoption, improve customer retention, and keep U.S. digital dollars competitive globally.
A ban may limit adoption, reduce competitiveness against foreign digital currencies, and shift innovation toward bank-friendly rules.
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