The American Bankers Association (ABA) has declared addressing stablecoin yields as a key focus for 2026, highlighting the ongoing conflict with US lawmakers regarding the perceived negative impact on banks’ competitiveness.
The ABA mentioned on Tuesday that stopping stablecoins from acting as deposit alternatives — which could potentially undermine lending in community banks by not permitting interest or rewards — is among its essential policy goals for this year.
Stablecoin regulation is a major focus, alongside combating financial fraud, preventing arbitrary interest rate limits, and promoting mission-driven banks. ABA CEO Rob Nichols stated that these objectives derive from feedback provided by institutions of various sizes.
Banking Leader Forecasts Shift of $6 Trillion from Banks
The dispute centers on the belief that yield-bearing stablecoins may siphon deposits from conventional banking institutions, which the ABA claims would hinder lending abilities and diminish banks’ roles within the financial landscape.
In a prior statement, Bank of America CEO Brian Moynihan contended that up to $6 trillion might exit banks in favor of interest-generating stablecoins. While previous legislation, the GENIUS Act, restricted stablecoin issuers from providing interest to their holders, the ABA’s Community Bankers Council observed a potential loophole that could allow yield-bearing stablecoins to undermine traditional banks.
Circle’s CEO Rebuts Yield Worries
The Community Bankers Council advised Congress to incorporate stricter stablecoin regulations to restrict yield offerings via third parties.
However, leaders in the cryptocurrency sector assert that enabling stablecoin yields could ultimately benefit the economy. Circle CEO Jeremy Allaire considered the notion that stablecoin yields could incite bank runs as unrealistic, noting their role in enhancing customer loyalty. He remarked at the World Economic Forum, “They help with stickiness, they help with customer traction.”
In contrast, Anthony Scaramucci from SkyBridge Capital critiqued any prohibition on yield-bearing stablecoins as likely to place the US dollar at a disadvantage compared to China’s digital yuan.
