Banks Seek Tighter Stablecoin Rules, Citing Deposit Risks

2026-09-25

Banking trade groups are urging for stricter limits on stablecoin issuance, warning that exceptions could divert funds from traditional banking and impact lending capacity. They argue that interest-bearing stablecoin features pose a competitive threat to bank deposits.

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Banking trade groups are requesting stricter rules for stablecoins, specifically regarding interest-bearing features. They are concerned that these features could cause depositors to move funds from traditional banks, potentially reducing the banks' ability to lend.

Key facts

Eight financial trade associations have asked for more rigorous regulations on stablecoins.
The associations are concerned about exceptions that allow stablecoins to offer interest-like rewards.
They believe these stablecoin features could lead to a significant outflow of deposits from commercial banks.
A potential reduction in bank deposits could impact the capacity of banks to lend.
The feedback was submitted on proposed legislation concerning the stability of the financial system.

Source: Decrypt

Reported by VERA Newswire.