Cryptocurrency Companies Can Keep Paying Interest-Like Rewards, Say Federal Bank Regulators
Regulators said exchanges may pass along stablecoin earnings to customers on a case-by-case basis, while issuers remain barred from paying interest.
- On Wednesday, the Office of the Comptroller of the Currency ruled that cryptocurrency exchanges may pass stablecoin earnings to customers, though stablecoin issuers remain prohibited from paying interest directly to coin holders.
- Implementing the GENIUS Act signed last year, the rules codify stablecoin regulations; banking groups opposed the decision, fearing higher cryptocurrency yields could trigger deposit flight and reduce lending capacity.
- Coinbase offers yields of up to 3.5% on USDC balances, significantly higher than the 0.38% average for traditional savings accounts, as stablecoins maintain a value of $1 per coin backed by interest-bearing Treasuries.
- The American Bankers Association warned the decision will threaten "the funds banks use to make the loans that drive the U.S. economy," while Phillip Basil, director of economic growth and financial stability at Better Markets, called it a "free pass."
- This outcome preserves the status quo for cryptocurrency platforms, yet consumer groups remain concerned that users might view these rewards as similar to bank accounts despite lacking Federal Deposit Insurance Corporation protections.
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Cryptocurrency companies can keep paying interest-like rewards, say federal bank regulators
NEW YORK (AP) — Cryptocurrency companies can continue to pay interest-like rewards to customers, federal regulators said Wednesday, despite warnings from banks that such programs could drain trillions of dollars in deposits from the banking system. The new rules are part of the implementation of the GENIUS Act, which was signed into law last year...
Cryptocurrency companies can keep paying interest-like rewards, say federal bank regulators – WTOP News
NEW YORK (AP) — Cryptocurrency companies can continue to pay interest-like rewards to customers, federal regulators said Wednesday, despite warnings from banks that such programs could drain trillions of dollars in deposits from the banking system. The new rules are part of the implementation of the GENIUS Act, which was signed into law last year...
Cryptocurrency companies can continue to pay interest-like rewards to customers, US regulators said Wednesday, despite banks' warnings that such programs could drain trillions of dollars into bank system deposits.
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