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Crypto

ABA makes ban on interest-bearing stablecoins top 2026 policy priority

The American Bankers Association, which represents the U.S. banking industry, has named a ban on interest-bearing stablecoins as its top policy priority for 2026. It warned that payment stablecoins offering interest or rewards could function as substitutes for consumer deposits, potentially eroding the deposit base underpinning the financial system, particularly at regional banks. The stance follows rapid stablecoin growth and issuers offering 4 to 5 percent annual interest to attract users.

Crypto

Stablecoin interest ban could trigger capital outflows abroad

A U.S. CLARITY bill banning interest payments on stablecoins could increase the risk of capital leaving regulated markets for overseas venues or opaque financial structures, Cointelegraph reported on Jan. 24. Mega Matrix market head Colin Butler warned that legal stablecoins without yield could drive funds offshore or into out-of-regulation finance. Under the newly enacted GENIUS law, payment stablecoins such as USDC must be fully backed by cash or short-term Treasuries and cannot pay interest directly to holders.