Bank vs Crypto: 3,200 People Petition to Fix the Loophole, US Stablecoin Policy Stalls

Stablecoin yields have become the new battleground for cryptocurrency regulation in the United States. As debates intensify over who can benefit from the next round of financial regulation—banks, crypto companies, or policymakers—the passage of key legislation such as the CLARITY Act is caught in a tug-of-war. This seemingly technical policy dispute actually reflects deeper contradictions stemming from the escalating competition between traditional finance and digital assets.

Political Game Intensifies: Stablecoin Yields in Focus

Whether stablecoins can offer returns to users is no longer just a technical issue but a political one involving interests and distribution. According to recent reports, banking lobbies are attempting to prevent crypto platforms from offering stablecoin rewards to users, even though such practices are permitted under existing laws.

Galaxy CEO Mike Novogratz clearly pointed out the core issue: banks are more concerned about deposit outflows than genuine consumer protection. Over 3,200 banking industry professionals have petitioned the Senate Banking Committee to close what they call the “interest payment loophole,” claiming that stablecoin rewards could weaken community banks’ lending capacity.

The Paradox of Differentiated Regulation

There is an obvious logical contradiction here. According to information, banks can still pay interest on deposits, while crypto platforms can only offer limited yields through staking or liquidity provision. This differentiated regulation effectively distorts market competition rather than protecting consumers.

Novogratz emphasized that the GENIUS Act has provided legal space for certain stablecoin yields, but this has not stopped lobbying pressure from banks. The Senate Banking Committee has already slowed down the review process of the CLARITY Act, which directly reflects the influence of the banking sector.

Uncertainty in the Regulatory Framework

Divisions between the White House and the crypto industry are also widening. According to reporter Brendan Pedersen, the government remains dissatisfied with the compliance of the US’s first regulated CEX, despite ongoing communication. This wavering attitude directly impacts policy direction.

Patrick Witt, Executive Director of the White House Digital Asset Advisory Committee, issued an important warning: do not miss the legislative window chasing perfection. He believes that establishing a framework during a pro-crypto administration is much more realistic than facing stricter versions in the future. This suggests that the current policy window may not last long.

Legal Community’s Concerns

Lawyer Bill Hughes from Consensys raised a deeper concern: even without a financial crisis, punitive regulation could quietly emerge. Some key provisions might be “hidden” within bills that must pass. This indicates that the issue of stablecoin yields is only a surface conflict, with more complex regulatory battles behind the scenes.

Industry Responses and Future Outlook

In the face of regulatory uncertainty, the crypto industry is accelerating its actions. According to recent reports, Citrea has launched its native USD stablecoin, ctUSD, aligned with the upcoming GENIUS Act stablecoin regulation framework. This demonstrates the industry’s proactive adaptation to policy changes rather than passive waiting.

Meanwhile, Galaxy, led by Mike Novogratz, is also adjusting its strategy. Galaxy plans to launch a $100 million hedge fund in Q1 2026, with up to 30% invested in cryptocurrencies and the rest in financial services stocks impacted by digital asset technology and legal developments. This investment approach reflects Galaxy’s cautious stance toward the policy environment.

Summary

The battle over stablecoin yields is fundamentally a contest over market structure. Banks leverage lobbying efforts to maintain their deposit advantage; crypto firms seek equal opportunities within the legal framework; policymakers aim to balance the interests of both sides.

The key question is: if legislation like the CLARITY Act fails to pass, the real victims will be American retail users and innovative financial enterprises. The current policy window is limited, and the crypto industry must seize the opportunity. Regulators also need to find a true balance between consumer protection and market innovation. This tug-of-war is far from over and may continue to influence the future trajectory of digital asset regulation in the US.