Banks plan to renew their push to bar crypto platforms from paying yield on stablecoin balances. TD Cowen's Washington analyst still sees only narrow odds that Congress passes a ban.
TD Cowen analyst Jaret Seiberg puts only a 10% chance on Congress enacting a ban on stablecoin yield over the next two years. He wrote in a Monday policy note that banks will try again to stop crypto platforms from paying yield on stablecoin balances.
Seiberg sees a narrow path for a ban. His reasoning is procedural as much as political: it may be easier to find 60 Senate votes on stablecoin yield alone than on the broader crypto market structure bill.
Why Seiberg still sees a path
That broader bill failed a cloture vote 49-50 on Sept. 15, and Seiberg has already called it effectively dead for this Congress after the Democratic midterm sweep. A ban, he wrote, would benefit banks, and he expects them to renew the push in the next Congress.
The Senate is shifting, according to the note. Key crypto advocates retired or lost, while skeptics are being elevated, and Sen. Elizabeth Warren is likely to chair the Banking Committee. Even so, it is not his base case, and he wrote that crypto politics are complex.
Democrats may resist a yield-only bill. Seiberg wrote that Democrats will insist on ethics and investor-protection provisions President Trump would reject, which makes them unlikely to unite behind it. There is also an optics problem, because Congress would be asked to stop voters from earning a return on stablecoins even though they can earn one on savings accounts and money market funds.
What the GENIUS Act left open
The fight is leftover business from the GENIUS Act, which President Trump signed on July 18, 2025. The law bars permitted and foreign payment stablecoin issuers from paying interest or yield solely for holding, using or retaining a payment stablecoin, but it does not explicitly cover exchanges and other intermediaries.
Banks call that gap the loophole. The American Bankers Association and state bankers associations urged Congress late last year to treat platform rewards as banned interest, and the Independent Community Bankers of America has warned that yield-bearing payment stablecoins could pull deposits from community banks and cut local lending.
The odds are not zero, Seiberg wrote, because community banks are effective at making that argument and small banks have a record of getting Congress to act. He remains dubious.
Source: Bitcoin Magazine
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