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While Congress pushes ahead with the CLARITY Act, the unfinished fight over how the U.S. draws the line between “crypto” and “securities” is spilling into public view, and into a familiar blame game.
Online, critics argue the bill’s structure could hardwire advantages for regulated incumbents, with centralized platforms accused of quietly backing tweaks that would make it harder for DeFi to compete on equal terms.
CLARITY is being sold as a market-structure bill, but the most consequential battle may be over distribution.
Stablecoin rewards turn “holding dollars” into a competing product category, and banks are fighting to keep that feature from becoming normalized outside the deposit system. Platforms frame it as a loyalty perk rather than interest, while lawmakers look for language that preserves “digital cash” while limiting “hold-to-earn” behavior.
Banks are resisting retail stablecoin yield because it competes with deposit pricing and the payment relationship that underpins consumer banking.
According to the FDIC’s most recent Monthly Rate Cap Information dated Dec. 15, 2025, the national rates used in its rate-cap framework were 0.39% for savings, 0.07% for interest checking, and 0.58% for money market deposit accounts.
In the same table, the Treasury reference yield for those non-maturity products was 3.89%.
That gap is not a direct proxy for bank profit, but it quantifies how far retail deposit pricing can sit below government rates when customer behavior, bundled services, and switching friction keep balances in place.
| FDIC category (Dec. 15, 2025) | National deposit rate | Treasury reference yield | Gap |
|---|---|---|---|
| Savings | 0.39% | 3.89% | 3.50% |
| Interest checking | 0.07% | 3.89% | 3.82% |
| Money market deposit account | 0.58% | 3.89% | 3.31% |
Stablecoin yields put pressure on bank deposit rates, and expose the spread
Stablecoin rewards compress that distance by giving retail users an alternative place to hold dollar balances with a return that can sit near the short end of the curve.
The U.S. Treasury’s daily yield curve series shows the three-month point at 3.88% on Nov. 28, 2025, placing the market’s cash benchmark close to the FDIC table’s 3.89% reference.
A stablecoin yield near that range changes the retail question from “Which bank pays the most?” to “Why is my cash return far below the government rate?”
From a balance sheet perspective, the pressure is forward-looking because the decision point is marginal funding cost, not legacy averages.
If deposits migrate out of checking and savings into stablecoin balances, banks can respond by raising deposit rates or replacing funding through wholesale channels.
Both paths raise interest expense, and they can do so quickly.
According to the Federal Reserve Bank of New York, the Secured Overnight Financing Rate is a broad measure of the cost of borrowing cash overnight collateralized by Treasury securities, a benchmark that shapes repo and other short-term funding markets used by large financial firms.
When retail deposit outflows push banks to rely more on market funding, the price of that replacement can track policy rates more directly than retail deposits have historically done.
The retail distribution layer is where banks see the largest strategic risk.
The hidden cost of higher bank funding reliance: why deposit flight matters
According to Coinbase’s USDC Rewards overview, the program is a Coinbase-funded loyalty program, rewards accrue based on balance and the rewards rate, and Coinbase says it does not use or lend USDC without customer instruction.
The same page notes that, in several regions including the United States and United Kingdom, eligibility requires a Coinbase One membership.
Coinbase’s USDC product page lists a 3.50% rewards rate and says USDC rewards are available to Coinbase One members, with plans starting at $4.99 per month.
Even when the exact reward rate is variable over time, programs like this present yield as a default feature of holding a cash-like balance on a platform that also supports transfers and trading.
That reduces the role of a bank account as the primary place to park dollars.
Banks also distinguish between sustained yields and promotional offers because the former can reset consumer expectations while the latter often behave like marketing spend.
Binance has run time-bound campaigns tied to its Simple Earn product.
According to a Binance announcement, one promotion offered a bonus tiered APR on USDC flexible products on top of a real-time APR component.
A separate Binance notice states that assets deposited in Simple Earn may be loaned to other Binance users, including margin and loan products.
It also notes that large redemption requests can delay redemptions temporarily.
For banks, that disclosure matters because it draws a line between a rewards rate funded by platform economics and a bank deposit funded within a supervisory framework.
Still, both compete for the same retail dollars.
Stablecoin rewards threaten banks’ deposits, and the customer relationship that comes with them
Opposition also reflects the payments and relationship layer that sits on top of deposits.
Checking accounts anchor payroll, bill pay, debit, ACH, and fee lines, and they support cross-sell into lending and wealth management.
If a share of transactional balances shifts to stablecoins held in custodial wallets, banks risk losing both funding and customer interaction.
That outflow can be more responsive than traditional deposit competition because transfers can settle at all hours without the same batch constraints as legacy rails.
Regulation has begun to frame how far stablecoins can go on yield, and CLARITY is becoming the vehicle for a fight GENIUS didn’t settle cleanly.
The GENIUS Act approach barred issuers from paying interest in order to keep stablecoins defined as “digital cash,” but platforms can still market “rewards” that function like yield, shifting the competitive impact into distribution.
CLARITY debate draws a line between “yield” and “loyalty” as stablecoin rewards come under fire
In the background is a narrower but more explosive drafting dispute: lawmakers are looking for language that bars interest paid simply for holding a stablecoin, while still allowing activity-based incentives framed as payments or loyalty rewards.
That distinction matters because it shifts the fight away from issuers and onto distributors: platforms can market a cash-like balance with a near-Treasury return without the token itself being labeled “interest-bearing,” and banks argue that’s functionally deposit interest by another name.
The result is an attempt to cap “hold-to-earn” expectations while leaving room for “use-to-earn” programs, plus disclosures designed to stop rewards from being sold as risk-free bank-style interest.
The near-term math banks track is not the spread between a Treasury yield and a single deposit rate.
It is the combination of deposit retention, deposit repricing, replacement funding, and how quickly those inputs can change if stablecoin rewards remain near cash benchmarks.
The FDIC’s Dec. 15, 2025 schedule lists 0.07% for interest checking and 0.39% for savings against a 3.89% Treasury reference yield.
Meanwhile, Coinbase’s USDC page lists 3.50% rewards for Coinbase One members, and Binance disclosures describe both promotional bonus structures and the ability to lend Simple Earn assets to other users.