Can the Genius Act Save Banks from Stablecoins?
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BTCCSquare news:
The banking sector faces renewed pressure from digital assets as stablecoins and decentralized finance products replicate the disruptive pattern of 1970s money market funds. Historical parallels reveal how Regulation Q's interest rate restrictions created vulnerabilities that non-bank competitors exploited—a dynamic now repeating with crypto-based yield products.
Paul Volcker's warnings about regulatory arbitrage take on new relevance as algorithmic stablecoins and DeFi protocols offer yields that traditional banks cannot match. The 1933 Banking Act's prohibition on demand deposit interest appears increasingly anachronistic in an era where blockchain-based alternatives operate beyond legacy regulatory frameworks.
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