The competition among stablecoins is growing, and Will Beeson, a former Standard Chartered executive, emphasizes that offering yield is crucial for their success. The recent GENIUS Act, signed by President Trump, prohibits direct interest payments by stablecoin issuers, but allows for third parties, like exchanges, to provide yield to users. This creates a potential loophole that banks fear could siphon off trillions from the U.S. banking system. Beeson relayed that while the act aims to regulate the stablecoin space, the inability for issuers to pay interest directly could push customers toward platforms providing yield. However, he acknowledged the legislative gridlock in Washington might hinder rapid changes to current regulations. Meanwhile, crypto advocates argue closing the loophole could stifle innovation and leave U.S. firms at a competitive disadvantage internationally, as they push back against claims about the potential deposit flight being exaggerated. The ongoing debate illustrates the tension between traditional banking interests and the emerging crypto landscape.

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