Banks vs. yield-generating stablecoins: a battle for control over payments

American banks are actively lobbying to ban any form of yield on stablecoins, fearing a drain on deposits and a weakening of the credit system. In August 2025, more than 40 banking associations urged Congress to expand the GENIUS Act, which prohibits direct interest, to close the loophole of fees from exchanges and issuer partners.
 
However, critics believe that concerns about stability mask a desire to preserve $187 billion in annual fee revenue. Coinbase dismisses the threat of "deposit erosion " as a myth: banks hold $3.3 trillion in Federal Reserve reserves, generating $176 billion in risk-free income—more than half of the sector's total profits.
 
Stablecoins like USDC and USDT, according to Coinbase, are used primarily for international transfers and DeFi, not as a savings vehicle. They reduce costs, speed up payments, and strengthen the dollar, rather than undermine the financial system.
 
Federal Reserve Chairman Christopher Waller compared resistance to stablecoins to past fears about ATMs and online banking. He believes that private innovation in partnership with the government is driving progress in payments.
 
While the US debates, Canada is moving forward: Tetra Digital Group, with the support of Wealthsimple, the National Bank of Canada, and Shopify, is preparing to launch a regulated CAD stablecoin by 2026, calling it a step toward economic sovereignty.
 
Growing dissatisfaction with banks (over 50% of Americans, according to Pew, 2024) and the demand for fast, low-cost payments make stablecoins an inevitable part of the future. Congress faces a choice: protect outdated models or open the market to competition. This decision will determine whether the dollar remains the leader in the digital age or loses ground to others.