Catenaa, Monday, March 02, 2026- US lawmakers has renewed the scrutiny of stablecoin rewards as concerns grew that yield bearing tokens could draw deposits away from traditional banks.
During a Senate Banking Committee hearing, legislators examined whether rewards offered by platforms resemble bank deposits but operate outside the protections tied to regulated institutions.
The debate follows the passage of the GENIUS Act last July, which bars issuers from paying direct interest on stablecoins but allows third party platforms to offer incentives.
Community banking groups warned that yield bearing stablecoins could weaken lending capacity by shifting funds out of local banks.
Some lawmakers requested independent analysis on whether such incentives could trigger deposit outflows and disrupt credit access.
Bank regulators including officials from the Federal Deposit Insurance Corporation, Office of the Comptroller of the Currency, National Credit Union Administration and the Federal Reserve said current data does not show widespread deposit flight.
Officials told lawmakers the banking system remains stable while regulatory agencies work on implementing rules tied to the GENIUS framework.
The Office of the Comptroller of the Currency issued a proposal this week outlining its role overseeing certain stablecoin issuers linked to national banks and savings associations.
The White House has convened discussions between banks and crypto firms and set a deadline later this month to find consensus on how rewards should be treated.
The renewed focus reflects broader efforts to balance digital asset growth with financial system stability as stablecoins expand into mainstream payment and settlement use.
