Whalesbook
Banks Lobby Against Stablecoin Rules Over Deposit Yields
Major U.S. banks are pushing regulators to slow down proposed stablecoin laws, especially the "Genius Act." Their main worry is how these rules could lead to losing traditional deposits and disrupt how banks generate income from them. Banks fear new federal rules for stablecoins could fundamentally change their earnings and competitive position.
The "Genius Act," enacted in July 2025, stops stablecoin issuers from paying interest directly. However, it allows third parties or affiliates to offer yield. This creates a significant "yield gap" compared to the low rates banks offer on standard deposits. Banks are concerned that billions could move from their accounts to stablecoin platforms, potentially impacting bank funding and their ability to provide loans.
Fintechs Seek Bank Charters to Compete
Meanwhile, the fintech sector is making strategic moves into traditional banking. Agora Financial announced on April 24, 2026, that it has applied for a national trust bank charter with the Office of the Comptroller of the Currency (OCC). The company aims to provide digital asset custody, investment advice, and stablecoin issuance services.
This move is part of a larger trend where many fintech and crypto firms are seeking bank charters. This grants them regulatory approval, access to payment systems, and more operational control. Companies like Affirm, PayPal, Ripple, and Circle have also pursued or obtained charters. This surge is partly due to a perceived friendlier regulatory environment for such applications under the current administration.
How Stablecoins Threaten Bank Profits
Traditional banks face significant challenges as the digital asset market grows. The main threat comes from potential outflows of deposits seeking higher yields from stablecoins. This could reduce banks' Net Interest Margins (NIMs), a key measure of profitability. Large U.S. banks typically have NIMs between 2.5% and 3.5%, while community banks range from 3.5% to 4.5%. A prolonged period of low interest rates, expected in 2026, tends to further squeeze these margins.
Furthermore, money moving to stablecoins could limit how much banks can lend. While the White House Council of Economic Advisers estimates that banning stablecoin yield would slightly boost bank lending by $2.1 billion, banking groups still worry about reduced credit availability for mortgages and small businesses. The banking industry's lobbying efforts, including pushing for broader yield bans through proposals like the "CLARITY Act," are a defensive measure to protect their established funding models from digital asset competition.
The Future of Banking and Yield
This mix of stablecoin regulation, fintech charter applications, and shifting economic conditions is reshaping the U.S. financial system. The "Genius Act" and the lobbying around it highlight a core debate about how financial services make money.
While some studies suggest stablecoin adoption might have a limited immediate impact on community bank deposits, fintechs like Agora actively seeking bank charters show a long-term move to integrate digital asset services within regulated structures. The outcomes of these regulatory battles and competitive strategies will likely change how financial services are delivered, how yield is generated, and what banking means in the future. Analysts expect more institutional adoption of digital assets, driven by clearer regulations and demand for alternative stores of value, signaling a maturing market.