The debate over how the U.S. defines "crypto" versus "securities" is intensifying as Congress considers the CLARITY Act. Critics suggest the bill could favor established financial institutions, potentially hindering DeFi's ability to compete. A key point of contention is stablecoin rewards, which offer an alternative to traditional bank deposits. Banks are concerned that stablecoin yields, which can rival short-term government rates, will draw customers away from savings and checking accounts. Data from the FDIC indicates a significant gap between national deposit rates and Treasury reference yields. The rise of stablecoins puts pressure on banks to increase deposit rates or seek alternative funding sources, potentially impacting their profitability.

The debate over how the U.S. defines "crypto" versus "securities" is intensifying as Congress considers the CLARITY Act. Critics suggest the bill could favor established financial institutions, potentially hindering DeFi's ability to compete. A key point of contention is stablecoin rewards, which offer an alternative to traditional bank deposits. Banks are concerned that stablecoin yields, which can rival short-term government rates, will draw customers away from savings and checking accounts. Data from the FDIC indicates a significant gap between national deposit rates and Treasury reference yields. The rise of stablecoins puts pressure on banks to increase deposit rates or seek alternative funding sources, potentially impacting their profitability.