U.S. bank lobbies warn over stablecoin ‘loophole’ for crypto exchanges, FT says

Banking lobbies including the American Bankers Association, the Bank Policy Institute and the Consumer Bankers Association cautioned lawmakers over a ‘loophole’ in stablecoin regulation that will enable some crypto exchanges to indirectly pay interest to stablecoin holders, the Financial Times’ Akila Quinio reports, citing banking industry representatives. The Genius Act bans issuers from paying “yield” or interest to customers meaning banks will be able to issue their own stablecoins, but are prohibited from paying any interest. However, crypto exchanges will be able to indirectly offer interest and rewards to holders of stablecoins that are issued by third parties. Publicly traded companies in the space include Bank of America (BAC), Citi (C), Goldman Sachs (GS), JPMorgan (JPM), Morgan Stanley (MS), U.S. Bancorp (USB) and Wells Fargo (WFC).