Launchy Regulatory Roundup #72 - US Bank Lobby 2026 Priority: Stopping Stablecoin Yields
Stablecoin Yield Bans Risk Pushing Capital Offshore
Marco Manoppo & Muhammad Reynaldi Ariananda Arkiang
January 25, 2026
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Welcome to our 72nd edition of the regulatory roundup. If you know anybody who would benefit from this content, please help us spread the word!
In Today's Edition:
Headline: US Bank Lobby 2026 Priority: Stopping Stablecoin Yields 🤦
Global Legal Roundup
Case Study: Stablecoin Yield Bans Risk Pushing Capital Offshore 🔎
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HEADLINE
US Bank Lobby 2026 Priority: Stopping Stablecoin Yields
State of play: The American Bankers Association has made stopping yield bearing stablecoins its top policy priority for 2026 as Congress works on new crypto market structure laws ahead of the midterms.
Banks argue yield paying stablecoins could replace deposits and drain lending from community banks.
The debate centers on whether interest paying stablecoins would drain deposits from the traditional banking system.
Bank of America CEO Brian Moynihan has warned that up to $6T could shift from banks into stablecoins if yields are allowed.
While the GENIUS Act already bans stablecoin issuers from directly paying interest, banks claim loopholes could still allow yields through third party structures and want Congress to close them.
Circle CEO has called the bank run narrative absurd, arguing that yields improve adoption and utility rather than destabilizing the system.
Anthony Scaramucci added that banning stablecoin yields could put the US dollar at a disadvantage versus alternatives like China’s digital yuan.
What’s Next: Congress is likely to revisit stablecoin rules in upcoming market structure bills, with banks pushing to close any loopholes that allow indirect yield through third parties.
Why it Matters: This fight will shape whether stablecoins stay simple payment tools or evolve into full deposit alternatives that compete directly with banks.
Our Take: Banks are less worried about stability and more about losing their monopoly on yield.
GLOBAL LEGAL ROUNDUP
America:
🇺🇲 Crypto market structure bill faces ethics amendment.
🇺🇲 Brian Armstrong to work on market structure bill in Davos.
🇺🇲 Trump sues JPMorgan over allegedly terminating bank accounts.
🇺🇲 CFTC Chair unveils 'Future Proof' initiative to upgrade crypto oversight.
🇺🇲 Revolut abandons US merger plans to pursue own de novo banking licence.
🇺🇲 SEC to dismiss Gemini Earn lawsuit with prejudice after full investor recovery.
🇺🇲 Kansas BTC reserve bill advances to Senate financial institutions committee.
Europe:
🇵🇹 Portugal orders Polymarket blocked after election bets surge.
🇫🇷 French authorities investigate data breach of crypto tax platform.
🇮🇹 Bank of Italy chief says banks, not stablecoins, anchor digital money.
🇪🇺 Binance applies for EU crypto license in Greece under MiCA framework.
APAC:
ðŸ‡ðŸ‡° HK to issue first batch of stablecoin licenses in Q1.
ðŸ‡ðŸ‡° HK industry body opposes stricter crypto licensing rules.
🇰🇷 South Korea weighs ending one-bank rule for crypto exchanges.
🇰🇷 South Korean prosecutors probe disappearance of seized BTC.
🇰🇿 Kazakhstan limits crypto trading to central bank-approved coins.
🇹🇠Thailand to introduce crypto ETF and futures trading in new regulation.
🇻🇳 Vietnam opens crypto exchange licensing with nearly $400M capital barrier.
CASE STUDY
Stablecoin Yield Bans Risk Pushing Capital Offshore
State of play: Proposed US rules under the CLARITY Act that restrict stablecoin yields could backfire by driving capital away from regulated markets and into offshore or opaque dollar alternatives.
Industry executives argue that banning yield on stablecoins does not eliminate demand. It simply redirects it to less transparent structures outside US.
Under GENIUS, payment stablecoins like USDC cannot pay interest, even though their backing assets like short term Treasuries yield around 3.6%.
Critics say this creates a mismatch where banks keep the yield spread while depositors earn little, making it rational for users to seek returns elsewhere.
The concern is that yield bans will increase demand for synthetic dollars such as Ethena’s USDe, which generate returns through trading strategies rather than one to one reserves and sit in regulatory gray areas.
While banks warn of deposit flight, analysts argue consumers already access yield through money markets and T-bills, and stablecoins simply bring that access onchain.
With China’s digital yuan now interest bearing and other financial hubs embracing yield enabled digital assets, banning compliant stablecoin yields could weaken the US dollar’s competitiveness and push innovation offshore.
Our Take: This is the tradeoff. Clearer rules come with much heavier surveillance. Protecting self custody and devs means less if Treasury can freeze transactions and push AML deep into DeFi.
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