WASHINGTON--Prior to the Senate Banking Committee’s expected markup of digital assets legislation Thursday, America’s Credit Unions’ sent a letter to the committee reiterating its opposition to stablecoin rewards.
As CUToday.info has reported, stablecoin rewards are considered a "loophole" by many crypto experts, allowing crypto exchanges to provide a yield on stablecoin deposits, threatening deposits at financial institutions.
The letter, sent in advance of the hearing that was scheduled for Thursday only to be postponed, expressed the trade association’s support for the committee’s efforts in the updated draft to ensure inclusion of credit unions in the new digital assets marketplace, while providing additional suggested tweaks to further clarify credit union authority. ACU said it has led credit union efforts in working with the committee to ensure credit union inclusion in the new draft after credit unions were left out of previous drafts.
The letter also outlined that stablecoin issuers should not be able to bypass the GENIUS Act’s prohibition on offering interest or yield on stablecoins through surrogate forms of passive rewards.
“We believe credit unions and stablecoin issuers can coexist and play distinct roles in a competitive digital asset market; however, such an equilibrium is threatened if stablecoins are designed to displace demand deposits as a preferred form of money,” the letter reads.
America’s Credit Unions also urged that the Committee should also reject any “unrelated or unvetted” amendments to the Clarity Act during the marking, including efforts to establish a federal rate cap on financial products or involve the federal government in further regulation of interchange. The House passed its version of the bill in July.