Legacy banks continue to complain about the possibility of stablecoin yield or rewards included in the CLARITY Act. While banks use fear, uncertainty, and doubt to warn that they will not be able to lend money to consumers and businesses if stablecoin holders earn yield, as they will flee the meager returns provided by savings accounts, nothing could be further from the truth. Banks’ true worry is a reduction in profits as they are more than capable of competing with other financial firms, including those providing crypto services.
Nick Puckrin, co-founder of Coin Bureau and a macro analyst, says banks are shooting themselves in the foot by continuing to oppose the stablecoin yield compromise.
“As long as the stalemate continues, crypto platforms can continue outperforming them on yield. A resolution this side of the midterms is as much in their interest as it is in the crypto industry’s,” says Puckrin. “The fervor with which Senators Tillis and Alsobrooks are protecting the agreement as it stands shows a continued commitment to innovation and acceptance that the financial landscape is changing. Banks will have to concede some ground, just like they did with money market funds in the 1970s. The industry must be allowed to evolve.”
Puckrin believes that the compromise will work out along the lines of cashback rewards that banks already offer. These are rewards that are tied to activity, not passive holdings.
“The opposition grossly overstates the impact this will have on traditional bank deposits. What the compromise does is give end users options to put their cash to use, at a time when the outlook for other asset classes is shaky. Consumers deserve this choice.”
While the exact language is still unclear and can change during markup, it appears that banks got a good deal. Still, they continue to complain instead of doing what they should: innovating, updating, and evolving to provide better services to their customers.
