How Banking Lobby Pressure Weakened Crypto's Stablecoin Rewards in U.S. Market Structure Bill

Source: CryptoNewsNet Original Title: How a battle with bankers tarnished crypto’s market structure bill near the finish line Original Link: As exhausted crypto lobbyists continue to pore over the latest — and most important — draft of the bill that could decide their regulatory fate in the U.S., it wasn’t a dispute between political parties that was the greatest disruption in what they hoped to get into the document, but the arrival of bank lobbyists at the negotiating table.

Yield and rewards for stablecoins became the battleground in a lobbying brawl between the banking industry and the crypto industry. In the end, though the bill released at midnight by the Senate Banking Committee seems to still include a number of elements that the crypto crowd hoped would be there, its hard-won fight to protect rewards for stablecoin users took a step backwards.

“What is threatening progress is not a lack of policymaker engagement, but the relentless pressure campaign by the big banks to rewrite this bill to protect their own incumbency,” said Summer Mersinger, CEO of the Blockchain Association.

After getting the Guiding and Establishing National Innovation for U.S. Stablecoins (GENIUS) Act into law last year, the crypto sector has been moving forward on its business plans for offering rewards programs for customers. The law concluded that issuers couldn’t offer yield on stablecoins, but it didn’t prevent affiliates and third parties from doing so. Platforms can share back a portion of the benefits they may get from an issuer, such as the interest they may receive from the reserves set aside to protect stablecoins. Bankers stepped forward after the passage of GENIUS — and well into the long process for negotiating the market structure bill in Congress — to contend that this was a fundamental threat to the depository system that underpins the U.S. banking sector and its lending. It could jeopardize the survival of community banks, they suggested.