The war against yield continues, the banks fear outflows as stablecoins popularity and usage grows. The market today is worth over $313 billion and over half a billion users worldwide.
This users count could quickly grow over 1 billion over the next year as stablecoins become widely integrated into payment apps, commerce apps and across most financial platforms.
Coinbase insists that the US Treasury cannot override Congress’s intent on the GENIUS Act, but banks continue to press for a blanket ban on stablecoin interest.
The US Department of the Treasury is facing conflicting feedback from crypto companies and traditional banking groups over how to implement the GENIUS Act, the law that regulates stablecoin payments in the US.
In a letter on Tuesday, Coinbase urged the Treasury to limit a ban on stablecoin interest payments exclusively to stablecoin issuers, while allowing it for non-issuers, such as crypto exchanges. Coinbase said its proposal aligns with Congress’s intent when passing the legislation.
“Congress went no further,” Coinbase said, adding: “It declined to include non-issuer third parties within that prohibition because banning other types of payments on stablecoins across the board would have inhibited growth and innovation of the stablecoin market — contrary to the GENIUS Act’s core purposes.” The exchange concluded:
“Treasury has no authority to second-guess Congress’s work.” — Cointelegraph report
Coinbase doing the lord's work, fighting for crypto?
I can acknowledge that Coinbase has done a lot for crypto, but this is just business, a blanket stablecoin yield ban threatens Coinbase’s business and some other exchanges out there. There are numerous crypto projects offering yield on stablecoins as I type this and banks do not want that.
They want to be the only entities that can access "safe capital" to expand their economic influence, paying pennies for it and making billions annually.
Well, those days are over as the stablecoin market continue to grow.
I think it's amusing how the banks are fighting for their lives, if they had backed crypto companies years back, they would all be better positioned to profit from any growth in the market.
Now they want to limit innovation over yield on stablecoins?
I think Coinbase has a strong argument, it is enough that issuers are not allow to offer yield to manage risks to traditional finance, but extending a ban to everyone else except the banks just slows innovation.
Fearing that $6.6 trillion in bank deposits will move is not a valid argument for the request being made. The banks have to adjust to the changes taking place, they have to learn to play the game of incentives in the crypto market.
They might not see it now, but centralized exchanges and their affiliates are the least of their problems, long-term.
Decentralized markets and solutions will be greater threats to the banks. For as long as blockchains stay building to remain meaningfully decentralized, the future of finance and markets will be powered by an underlying decentralized finance system.
It's inevitable. Decentralized savings solutions will come as the on-chain market grows in liquidity. Decentralized lending and borrowing will explode.
The banks fear $6.6 trillion in deposits moving away, when they'll really be loosing much more.
There's at least over $80 trillion is value at risk of moving away from the control of the banks.
Very few believe that this is going to happen because they don't understand how software and the growing digital markets will influence economies and governments of the future.
Posted Using INLEO