Every dollar backing a major stablecoin sits in something that pays interest, and the argument over who is allowed to receive that interest has become the most consequential unresolved question in digital-asset policy.
Issuers hold reserves in short-term Treasuries and bank deposits and keep the yield. Crypto exchanges and distribution partners have found ways to pass a share of it back to users as rewards, which functions, from the customer's point of view, like a savings account that settles in minutes and works on weekends.
Banks argue that is precisely the problem. Their case is about deposit flight: if a token that behaves like cash also pays something close to the policy rate, retail balances leave community banks, and the lending those deposits fund gets more expensive. Industry groups have pushed to close what they describe as a loophole allowing rewards to be paid indirectly by affiliates when the issuer itself cannot.
Crypto firms counter that the restriction protects margins rather than consumers, and that a bank's objection to competition is not a financial-stability finding.
The fight has become one of the sticking points slowing broader market-structure legislation. Neither side wants the question settled by an agency rule that a later administration could reverse, which is why both keep pushing it back into the text of a bill.