TD Cowen says banks likely to lose stablecoin yield fight, but prolonged dispute could put crypto bill at risk

Investment bank TD Cowen has released a report indicating that while traditional banks are actively lobbying to prevent stablecoin issuers from offering interest-bearing features, they are unlikely to succeed in the long term. The bank notes that yield is a fundamental component of the digital asset ecosystem, and restricting it would significantly hamper the utility of stablecoins. However, the report also warns that this ongoing friction between the banking industry and crypto advocates could stall critical legislative progress. If the debate over yield and reserve requirements remains unresolved, it could derail the passage of a comprehensive stablecoin bill in Congress, leaving the industry without a clear regulatory framework and potentially pushing innovation outside of the United States.

Source: TD Cowen says banks likely to lose stablecoin yield fight, but prolonged dispute could put crypto bill at risk