Blockchain Association Opposes Expansion of Stablecoin Yield Ban

The Blockchain Association, alongside over 125 industry groups and companies, is pushing back against proposed restrictions on stablecoin rewards. In a letter to the Senate Banking Committee, the coalition argues that limiting lawful incentives WOULD disrupt the carefully balanced framework of the GENIUS Act, which regulates dollar-pegged stablecoins.

Consumer choice and innovation are at stake. The GENIUS Act explicitly permits intermediaries to offer rewards while prohibiting issuers from paying interest. Altering this provision could stifle competition and create unnecessary uncertainty in a market that has shown no systemic risk from such incentives.

The debate reflects a broader tension between preserving traditional banking models and fostering financial innovation. Evidence suggests rewards programs haven't threatened bank stability—critics appear more concerned with protecting legacy revenue streams than consumer safety.