Crypto advocates are standing their ground against Wall Street bankers in the ongoing debate over stablecoin yields, with the Digital Chamber releasing its own set of principles to defend the need for rewards in the Senate Banking Committee's draft bill. The group's CEO, Cody Carbone, emphasizes the importance of compromise, stating that they are willing to give up interest payments on static stablecoin holdings but still want to allow rewards for customer transactions and activities. The Digital Chamber's principles highlight two key reward scenarios: those tied to providing liquidity and those fostering ecosystem participation, which are particularly crucial in decentralized finance (DeFi).
The White House has urged both sides to find a compromise by the end of the month, but the bankers have remained firm in their stance, arguing that stablecoin yields threaten the core depository activities of the U.S. banking system. The bankers' position is outlined in a one-page paper titled "Yield and Interest Prohibition Principles." The Digital Chamber counters with its own principles, defending the need for rewards in certain situations, and also accepts the bankers' request for a two-year study on stablecoins' impact on deposits, as long as it doesn't lead to automatic regulatory rulemaking.
The GENIUS Act, which allows stablecoin products, is the current law, and the Digital Chamber's willingness to scrap rewards on static holdings is seen as a significant concession. However, the bankers are trying to amend this law with the Digital Asset Market Clarity Act. The Senate Agriculture Committee has passed its version of the Clarity Act, focusing on commodities, while the Senate Banking Committee's version is more about securities. The outcome of the bill's progress will depend on the support of Democratic senators to reach the 60-vote margin required for approval in the entire Senate.
The DeFi Education Fund, a U.S.-based advocacy group, has also weighed in, urging the UK's Financial Conduct Authority (FCA) to anchor crypto rules to 'unilateral control' over user assets and transactions. The group argues that non-custodial DeFi developers should not be treated like centralized intermediaries and warns that applying trading platform and prudential requirements to automated protocols would be structurally incompatible. The ongoing negotiations between crypto advocates and bankers highlight the complex and evolving nature of cryptocurrency regulation, with both sides presenting their own principles and arguments to shape the future of the industry.
