The Blockchain Association, a nonprofit crypto advocacy organization, wrote a letter to the U.S. Senate Banking Committee signed by over 125 crypto industry groups and corporations opposing the ban on third-party providers and platforms that provide customer rewards for stablecoin holders.
Extending the GENIUS regulatory framework for stablecoins' ban on stablecoin issuers from sharing revenues directly with customers to third-party service providers stifles innovation and results in “greater market concentration,” the letter says.
The letter compared the rewards offered by crypto platforms to those offered by bank card corporations, banks and other traditional payment providers.
The letter rejects efforts to forestall crypto platforms from sharing revenue with customers. Source: The Blockchain Association
Banning crypto platforms from offering similar rewards for stablecoins gives established financial services providers an unfair advantage, in response to the Blockchain Association.
“The potential advantages of payment stablecoins won’t be realized if these payment types cannot compete on a level playing field with other payment mechanisms. Rewards and incentives are a typical feature of competitive markets.”
The Blockchain Association has issued several statements and letters pushing back against efforts to ban crypto platforms from sharing high-yield opportunities with customers, arguing that these rewards help consumers offset inflation.
FDIC paves way for banks to issue stablecoins, industry group says Stables usually are not a threat
The Federal Deposit Insurance Corporation (FDIC), the U.S. regulator that oversees and insures the banking sector, released a proposal on Tuesday that might allow banks to issue stablecoins through subsidiaries.
Under the proposal, each the bank and its stablecoin subsidiary can be subject to FDIC rules and assessments regarding their financial performance, including reserve requirements.
The FDIC proposal to permit banks to issue stablecoins. Source: FDIC
The Blockchain Association continues to keep off against claims that yield-producing stablecoins and the sharing of rewards with customers threaten the banking sector and bank lending.
“Evidence doesn’t support the claim that stablecoin rewards threaten community banks or lending capability,” the Blockchain Association said, adding that it’s difficult to make the claim that bank lending is definitely constrained by customer deposits.
Still, the banking industry has pushed back against high-yield stablecoins and crypto platforms that share earnings with customers, fearing that rates of interest on digital asset products would erode banks' market share.
