2026-01-10 07:34:19

Interesting things are happening. The U.S. Congress has introduced the "GENIUS Act," explicitly prohibiting stablecoin issuers from paying interest to holders. It sounds quite strict, but the issue is—this ban only applies to issuers, not to distributors.

So guess what? A major exchange quickly started offering a 3.35% annual yield to users holding USDC on their platform. Technically, it's not illegal, but in practice, it completely circumvents the regulatory intent. Clever, but such operations clearly poke some people's nerves.

As the U.S. Senate is about to review the "Crypto Market Structure Act" on January 15 (which aims to establish a regulatory framework for the entire crypto market), the tug-of-war over "whether the interest ban on stablecoins should extend to the distribution stage" has already fully erupted.

Who is the most fierce opponent? The American Bankers Association. On January 5, they issued a public letter, strongly stating: The interest ban in the "GENIUS Act" should not only target issuers but must also include distributors, custodians, and related parties. They are now pushing to include this "broad interpretation" into the "Crypto Market Structure Act."

Why is the banking industry so fired up? It all boils down to one word—money. When stablecoins provide yields on exchanges, users are willing to keep their funds on-chain and on exchanges rather than depositing into traditional banks. Once bank deposits are lost, the lending capital pool shrinks, and the entire business model is affected. They have calculated this very clearly.

USDC-0,02%

View Original

This page may contain third-party content, which is provided for information purposes only (not representations/warranties) and should not be considered as an endorsement of its views by Gate, nor as financial or professional advice. See Disclaimer for details.

11 Likes

Reward
11
8
Repost
Share

Comment

0/400

CompoundPersonality

· 12h ago

Ha, it's the old trick of regulators trying to close loopholes and exchanges fighting back. Banks are getting anxious, after all, it's still a battle over who controls the wallets. 3.35% is not surprising; the real killer feature is the difference in user experience. Traditional banks can never compete with the on-chain ecosystem. Let's wait and see how the Senate's showdown unfolds. In the end, it's always a battle between technology and policy.

View OriginalReply0

WenMoon

· 01-11 22:45

Haha, the bankers are panicking, which means we're on the right track. --- Regulatory loopholes are opportunities for exchanges; they play the shell game skillfully. --- Banks want to monopolize all profits. Wake up, everyone. --- 3.35% annualized yield may not sound like much, but it's definitely better than saving in a bank. Traditional finance is playing with fire. --- It's typical for rule makers to try to block new players, but someone always finds a loophole. --- This round of exchange operations is truly top-notch; regulators can never keep up with the pace of innovation. --- The anxiety in the banking industry is probably a sign of Web3's victory. --- The tug-of-war must continue; let's see who shuts up first. --- Basically, it's a money-grabbing battle. Users should be clear about their choices. --- Brilliant, such a big legal loophole is really a gift to exchanges.

View OriginalReply0

DisillusiionOracle

· 01-11 11:35

The exchange's move was really clever; the regulatory loopholes were just torn open like that. Bankers are getting anxious, and honestly, it's understandable—without deposits, how can they make money? Let's wait and see the show on January 15th; it feels like this will cause some turbulence again. The real winners are still those who find loopholes, haha.

View OriginalReply0

GateUser-75ee51e7

· 01-10 08:03

Haha, bankers are really getting anxious. This regulatory tug-of-war is incredible. --- Exchanges' way of bypassing regulations is indeed clever, but they will have to be restrained sooner or later. --- Basically, it's a war over money. Banks are afraid users will move on-chain. --- 3.35% annualized return—wow, the temptation is real. No wonder traditional finance can't sit still. --- Regulators' game is becoming more and more complex. Such loopholes will be closed eventually. --- This time, the banking association is truly scared. The yield on stablecoins is their pain point. --- As always, capital seeks profit, regulators crack down, and users are caught in the middle. Haha. --- The revenue model of the distribution side really hits the core of the banking industry. No wonder their reaction is so strong. --- It feels like this new legislation will restrict the space for exchanges' operations. --- Money flowing on-chain has made traditional banks panic. Truly ironic.

View OriginalReply0

token_therapist

· 01-10 08:02

Haha, the bankers are getting desperate. This is getting interesting. --- The exchange's move is truly brilliant, playing with regulatory clauses like a game. --- Basically, traditional finance is screaming because they're afraid no one will keep their money there. --- Wait, if the distributors are also blocked, what’s the point of stablecoins? --- The American Bankers Association’s tricks are old news; they just want to stifle innovation. --- 3.35% vs 0.05% at banks—do you even need to ask? No wonder they’re panicking. --- It feels like this tug-of-war is far from over. We’ll see the outcome on January 15 in the Senate. --- Absolutely brilliant—exchanges are turning legal loopholes into business opportunities. --- Banks are crying in the bathroom, while users are laughing their heads off. --- Regulation is like this—someone always finds a gray area, an endless game of cat and mouse.

View OriginalReply0

InfraVibes

· 01-10 07:55

The exchange's move is indeed brilliant—they passed the compliance checklist but the spirit goes the opposite direction lol The bankers are getting desperate, money being siphoned onto the chain has them on edge Waiting to see how that punch lands on January 15th

View OriginalReply0

SchroedingerMiner

· 01-10 07:52

Haha, the way exchanges are dodging regulations is really clever; regulators can never keep up with innovation. Banks are getting anxious, this is truly a battle of industries. A 3.35% return rate, really pushing people onto the chain. Waiting to see how the Senate rules, it feels like this time the regulation will be even harsher. Traditional finance is really panicking; the feeling of their ecosystem being eroded is uncomfortable. Actually, it's been obvious for a long time that rules always have loopholes; it all depends on who finds them first. The banking association's move is basically about protecting their turf, no blame there. As for stablecoins, they will definitely be completely banned or regulated eventually.

View OriginalReply0

UnruggableChad

· 01-10 07:44

The exchange's move is brilliant, exploiting loopholes so clearly Regulators are always a step behind, it's no wonder bankers are anxious and frustrated 3.35% annualized vs zero interest, users' choices will speak for themselves

View OriginalReply0