A high-stakes debate has been ongoing in the US regarding the regulation of stablecoins. Major banks, including JPMorgan Chase, Bank of America, and Wells Fargo, have expressed opposition to initiatives that would enable crypto platforms to offer interest on stablecoin holdings.
Eric Trump, son of the US President, has weighed in on the issue, criticizing the banks for their stance. In a recent social media post, he argued that the banks are actively lobbying to ban higher returns for Americans on their savings and are trying to block any bonuses or incentives for customers.
The Federal Reserve pays banks an interest rate of 3.65% on deposits, while traditional bank rates range from 0.01-0.05% per year. This has sparked concerns that the low returns offered by traditional banks could lead to a significant outflow of deposits if stablecoins are allowed to offer higher yields.