US Lawmakers Revisit Stablecoin Rewards, Eyeing Deposit Flight Risks

Stablecoin rewards are back in the spotlight as US lawmakers express concerns over their potential impact on traditional bank deposits.

The issue was revisited during a recent hearing with top banking regulators, where senators raised questions about the blurring of lines between crypto products and insured bank deposits.

Sen. Angela Alsobrooks (D-Md.) expressed concern that stablecoin yield programs could 'resemble insured deposits without equivalent safeguards.' This has led to a debate over whether platforms should be allowed to pay users for holding or transacting stablecoins.