The Blockchain Association, with support from over 125 crypto industry groups, opposes the ban on third-party service providers offering rewards to stablecoin holders. A letter to the US Senate Committee on Banking argues that stifling innovation and market competition will result from expanding the prohibition outlined in the GENIUS stablecoin regulatory framework.

The Federal Deposit Insurance Corporation (FDIC) proposes allowing banks to issue stablecoins through subsidiaries. Both the bank and its stablecoin subsidiary would be subject to FDIC rules and assessments for financial fitness, including reserve requirements. The Blockchain Association refutes claims that yield-bearing stablecoins and customer rewards threaten the banking sector and lending capacity.

The Blockchain Association argues against the notion that stablecoin rewards harm community banks or lending capacity. Despite this, the banking industry has lobbied against yield-bearing stablecoins, fearing that interest on digital asset products will diminish the market share of banks. The debate continues over the impact of stablecoin rewards on the banking sector and lending practices.

Read more at Cointelegraph: Blockchain Association Petitions US Lawmakers, for Crypto Customer Rewards